Method and system for controlling the initiation and duration of overtime intervals in electronic auctions

ABSTRACT

A method and system for conducting electronic auctions is described. A mic lot closing extension feature avoids collisions in closing times of multiple lots by dynamically extending the closing time of a subsequent lot if a preceding lot&#39;s closing time is extended to be too close to the subsequent lot&#39;s then-currently can be extended with a flexible overtime feature, in which the properties of the event triggering the extension and the of the overtime period(s) can be tailored to a particular auction, particular lots of products within an auction, and to the particular time within an auction process. t can be set to a “pending” status after the nominal closing time for submission of bids to allow bidders to alert the auction coordinator of technical problems in submission of bids. This allows the possibility for a lot to be return to bidding by all bidders. The auction may be paused by the auction coordinator to correct technical, market and miscellaneous problems that may arise during the course of an auction. Individual bid ceilings can be set for each e required to bid lower than certain thresholds determined in advance of the auction. Failsafe error detection is performed to prevent erroneous bids from entering the auction. The auction coordinator has the ability to override any ent prejudice to the auction.

This is a continuation divisional of copending application Ser. No.09/252.790 filed on Feb. 19, 1999, which claims priority of provisionalapplications No. 60/101,141, filed on Sep. 18, 1998, and Ser. No.60/110, 846, filed on Dec. 4, 1998.

BACKGROUND OF THE INVENTION

The disclosed inventions relate generally to conducting electronicauctions, and in particular to business-to-business bidding auctions forindustrial purchasers.

TRADITIONAL PROCUREMENT MODELS

Procurement of supplies has traditionally involved high transactioncosts, especially information search costs. The introduction ofelectronic commerce has introduced new methods of procurement that lowersome of the transaction costs associated with procurement. Onlineprocurement, or business-to-business electronic commerce, matches buyersand suppliers so that transactions can take place electronically. Thereare three models for online procurement: catalog, buyer-bidding auction,and seller-bidding auction.

The “catalog” model of online procurement was the first to be developed.The first electronic catalogs were developed by suppliers to helpcustomers obtain information about products and order supplieselectronically. These first electronic catalogs were single-source; i.e.they only allowed customers to obtain information and products from thatsupplier.

However, customers were not satisfied with being “locked in” to onesupplier—they wanted to be able to compare a number of competingproducts to be sure of getting the product features they wanted, at thebest price. So suppliers with single-source electronic catalogs startedto include competitors' products on their systems. An example of this isAmerican's SABRE system, which includes offerings from competingsuppliers (airlines), thereby further reducing information search costs.By offering competing products, the electronic catalog that offerscompetitor's products becomes an “electronic market”.

Many of these systems are biased towards the supplier offering theelectronic market. Procurement costs can be further lowered with anunbiased electronic market that promotes competition.

For standard products and services, the need to have an unbiased markethas been met for many industries by third party “market makers.” Forexample, Inventory Locator Services has compiled a database that listsall airplane parts suppliers that have a certain item in stock. Buyersdial into the database to get information on the parts they need. Here,it is a third party, Inventory Locator Service, not a supplier, creatingthe unbiased electronic market.

The electronic catalog model of electronic commerce involves one buyerand one seller at a time. When many buyers compete for the right to buyfrom one seller, a buyer-bidding auction model is created. A noteworthyexample of the buyer-bidding auction model is that operated byPriceLine.com and described in U.S. Pat. No. ssued to Walker et al. Inthis system, potential buyers compete for airline tickets by submittinga bid for an airline ticket on the PriceLine website, and airlines canchoose to accept a bid, thereby committing the buyer to buy the ticket.dding auction types of electronic markets do not work in some situationshowever. If the required product is custom, it is not possible forsuppliers to publish a set price for a catalog market. Likewise, it isnot possible for buyers to identify the product they want to bid on in abuyer-bidding auction. There are fewer suppliers and no standard productand pricing information available for the buyer of custom industrialproducts. Traditionally, when a company requires a custom industrialproduct, procurement is made by a buyer for the company who searches fora supplier and acquires price quotes from a potential supplier for theneeded custom product. The search is slow and somewhat random because itusually relies heavily on personal relationships. The costs associatedwith locating vendors, comparing their products, negotiating, andpaperwork are a big factor in the make-or-buy decision. The cost ofswitching suppliers is very large, which means that the quoted price isprobably not the lowest fair price and that it is hard for a newsupplier to enter the market.

Therefore, buyers wanted to use auctions to save money. The assignee ofthe present application developed a system wherein sellers downwardlybid against one another to achieve the lowest market price in asupplier-bidding auction.

SUPPLIER-BIDDING AUCTION

In a supplier-bidding auction, bid prices start high and move downwardin reverse-auction format as bidders interact to establish a closingprice. The auction marketplace is one-sided, i.e. one buyer and manypotential suppliers. Typically, the rchased are components or materials.“Components” typically mean fabricated tangible pieces or parts thatbecome part of assemblies of durable products. Example componentsinclude gears, bearings, appliance shelves or door handles. “Materials”typically mean bulk quantities of raw materials that are furthertransformed into product. Example materials include corn syrup or sheetsteel.

Industrial buyers do not typically purchase one component at a time.Rather, they purchase whole families of similar components. At times,components are strongly related to one another. As an example, a buyermight purchase a given plastic knob in two different colors, or mightpurchase a nameplate in four different languages. These parts are sosimilar that by definition they must be purchased from the samesupplier—all of the knobs are made using the same mold. These items aretherefore grouped into a single lot. Bidders in industrial auctions mustprovide unit price quotes for all line items in a lot.

Auction Process

The process for a supplier-bidding auction as conducted by the assigneeof the present application is described below with reference to FIGS. 1and 2. FIG. 1 illustrates the functional elements and entities in ansupplier-bidding auction, while FIG. 2 is a process diagram thatidentifies the tasks performed by each of the involved entities.

The supplier-bidding auction model requires that the bidding product orservice be defined by the buyer (identified as Buyer 10 in FIG. 1). Anauction coordinator works with buyers to prepare for and conduct anauction and to define the potentially new supply relationships resultingfrom the auction.

As shown in FIG. 2, in the Initial Contact phase 102 of the auctionprocess, the coordinator contacts the buyer, and the buyer provides datato the coordinator. The coordinator prepares a specification 50 for eachdesired product or part 52. Once the product 52 is defined, potentialsuppliers for the product are identified. The coordinator 20 and buyer10 work together to compile this list of potential suppliers fromsuppliers already known to the buyer as well as suppliers recommended bythe coordinator.

The buyer makes a decision regarding which potential suppliers willreceive invitations to the upcoming Auction. Suppliers that acceptAuction invitations are then sent notices regarding the upcomingAuction, as well as client software to install in preparation ofparticipating the Auction.

In the RFQ phase 104, coordinator 20 works with the buyer 10 to preparea Request for Quotation (“RFQ”) 54. The coordinator collects andmaintains the RFQ data provided by buyer 10, and then publishes the RFQ,and manages the published RFQ. The RFQ includes specifications 50 forall of the parts 52 covered by the RFQ. In the RFQ 54, buyer 10aggregates similar part or commodity line items into job “lots.” Theselots allow suppliers 30 to bid on that portion of the business for whichthey are best suited.

During the auction 56, bids 58 will be taken against individual lots(and their thin RFQ 54. While bidders must submit actual unit prices forall line items, the competition in an Auction is based on the aggregatevalue bid for lots. The aggregate value bid for a lot depends upon thelevel and mix of line item bids and the quantity for each line item.Therefore, bidders submit bids at the line item level, but compete onthe lot level.

In the Auction Administration phase 106, coordinator 20 coordinates theAuction and administers the Auction setup and preparation. Thecoordinator sends a RFQ to each participating supplier, and assistsparticipating suppliers with preparation for the Auction.

In the Auction phase 108, suppliers 30 submit bids 58 on the lots andmonitor the progress of the bidding by the participating suppliers 30.The coordinator assists, observes, and administers the Auction.

When the bidding period is over, the auction enters the Auction ResultsAdministration phase 110. In this phase, coordinator 20 analyzes andadministers the Auction results, which are viewed by buyer 10. The buyerbegins to conduct final qualification of the low bidding supplier(s).The buyer may retain the right not to award business to a low biddingsupplier based on final qualification results or other businessconcerns.

In the ensuing Contract Administration phase 112, the coordinatorfacilitates settlements 62 awarded by the buyer 10 to suppliers 30.Contracts 52 are then drawn up between buyer 10 and suppliers 30.

Communications and Software ally between potential suppliers 30 at theirrespective remote sites and the coordinator 20 at its site. As shown inFIGS. 3 and 4, information is conveyed between the coordinator 20 andthe suppliers 30 via a communications medium such as a network serviceprovider 40 accessed by the participants through, for example, dial-uptelephone connections using modems, or direct network connections. Acomputer software application is used to manage the Auction. Thesoftware application has two components: a client component 31 and aserver component 23. The client component 31 operates on a computer atthe site of each of the potential suppliers 30. The client component isused by suppliers 30 to make bids during the Auction. The bids are sentvia the network service provider 40 to the site of the coordinator,where it is received by the server component 23 of the softwareapplication. The client component includes software used to make aconnection through telephone lines or the Internet to the servercomponent. Bids are submitted over this connection and updates are sentto connected bidders.

Bids can only be submitted using the client component of theapplication—this ensures that buyers do not circumvent the biddingprocess, and that only invited suppliers participate in the bidding.Typically, bidders can see their bids and bids placed by other suppliersfor each lot on the client component. When a bidder submits a bid, thatbid is sent to the server component and evaluated to determine whetherthe bid is from an authorized bidder, and whether the bid has exceeded apredetermined maximum acceptable price. Bids placed by a supplier arebroadcast to all connected bidders thereby enabling every participatingbidder to see quickly the change in market conditions and begin planningtheir competitive responses.

Conduct of an Auction

The conduct of an Auction will now be described in conjunction with theoperation of the software application. The Auction is conducted on aspecified date, and commences at a specified time. Bidding on each ofthe lots of products involved is scheduled to begin simultaneously atthe start time for the Auction. Each lot is assigned a scheduled closingtime after which further bids by potential suppliers submitted via theclient application will not be accepted by the server application. Theclosing times for the lots are staggered so that they are notcoterminous.

Associated with each lot at any given time in the progress of theAuction is a bidding status. The possible bidding statuses areillustrated in FIG. 5. The status initially assigned to each lot, beforethe scheduled start time of the Auction, is “Available.” This statusindicates that the lot will be available for bidding in the Auction. Inthe normal sequence of an Auction, the next bidding status is “Open,”which indicates that the Auction is underway and that bids can besubmitted for the lot. There are two possible bidding statuses to whicha lot with an “Open” status can change: “Overtime” and “Closed.”Overtime indicates an extension of time to allow bidding to continueafter the scheduled closing time for bidding on the lot. If bidding isstill active at the end of a first Overtime period of predeterminedduration, the server application allows a second Overtime, and so on,until bidding has closed. “Closed” indicates that the server applicationwill no longer accept bids on the lot. A lot's status changes fromOvertime only to Closed.

Information regarding the Auction that can be displayed by the clientapplication is illustrated in FIGS. 6A-6D at selected times during theconduct of an Auction. FIG. 6A illustrates lot information provided atthe start of an Auction. The lot closing times are shown for each of thelots (01-08) as 10:30:00 AM, etc. The lots are identified by name (e.g.“PP—Gas assist” which stands for “Gas Assist Polypropylene Parts” forlot 01). The indicated status for each lot is “OPEN.” The “Market Bid”column indicates the current lowest or best bid for the lot. The currenttime (10:00:11 AM) is shown in the upper right comer of the display.

The presented information changes during the course of bidding. Forpurposes of illustration in this example, a series of bids for lot 01 isshown in FIG. 8. Selected bids are identified by an “Event” code (A, B,etc.) in the first column. The bidder's identity is shown in the secondcolumn. The time at which the bid was submitted and the amount of thebid are shown in the third and fourth columns. Finally, the best bid inexistence at the time of each subsequent bid is shown in the lastcolumn.

The changes in status of lot 01 are also illustrated in FIG. 7 forselected times and corresponding bidding events during the Auction. FIG.7A shows a time line for lot 01, with the bid event letterscorresponding to the bids in FIG. 8.

This Auction employs a decision rule to trigger overtime that can bestated: “when a low bid is submitted during a first time interval tbefore the scheduled close, reschedule t.” Thus, for a time interval tof one minute, a scheduled closing time of 10:30 is extended to 10:31 ifovertime is triggered.

In this example, Bid A is received at 10:26:49. This bid has no effecton the status or on the scheduled closing time of lot 01, because itdoes not arrive within one minute of the scheduled closing time of10:30.

When bid B is received, the status of lot 01 immediately changes toOvertime, because bid B is a low bid and is received at 10:29:06, withinone minute of 10:30. The scheduled closing time is therefore delayeduntil 10:31, which is one increment t (one minute) after the originalclosing time of 10:30. This additional increment is available forbidders to consider whether to submit a bid in response to bid B.

When bid C is received, the status of the lot remains overtime, butbecause it was a new low bid and was received at 10:30:03, within oneincrement t of the then-scheduled closing time of 10:31, the scheduledclosing time is further delayed by one increment t to 10:32.

When bid D is received at 10:30:45, there is no effect on the status ofthe scheduled closing time, because although the bid is a new low bid($371,373) it is not received within one minute of the then-scheduledclosing time of 10:32.

Although Bid E is received within one minute of the scheduled closingtime of 10:32, it is not a new low bid (i.e. is greater than 371,373)and therefore no additional time is added. Lot 01 therefore closes at10:32.

FIG. 6B shows the status of the Auction at 10:27. Lot 01 is shown as“Open,” with a current Market Bid (best current bid) of $374,586. Thisreflects the status after bidding several bids have been received. FIG.6C illustrates the status of the Auction at 10:30 AM, after bids B andC. In bid B, Bidder15 submitted another best bid ($373,063), whichinitiated a one-minute overtime period, extending the closing time forlot 1 to 10:31. In bid C, Bidder7 submitted another best bid ($372,500),which initiated another one-minute overtime period, extending theclosing time for lot 1 to 10:32. Bid D, submitted at 10:30:45 wasanother best bid ($371,373), but was not submitted within one minute ofthe 10:32 closing time. Bid E, although submitted at 10:31:45, withinone minute of closing, was not a new low bid and therefore did notextend the closing time for Lot 1. Lot 1 therefore closed at 10:32, witha Market Bid of $371,373, as shown in FIG. 6D (which shows the status ofthe Auction at 10:32:05).

Bidding Dynamics

Suppliers prepare their price quotes in light of a number of factors.These factors include raw material prices, the design of existing diesor fixtures, the dimensional tolerance required of the component, theamount of engineering support the purchaser desires, the speed withwhich this particular buyer pays invoices, and the distance the productmust be shipped.

Supplier-specific factors also affect the price quotes. Capacityavailability, desirability of this particular buyer as a customer,desired levels of profit, and desire to diversify into other markets canall affect the price the seller is willing to accept to supply theneeded product. Market-specific factors that are not predictable duringthe preparation of quotations but that are evident during the auctioncan also be important in determining, for example, how aggressivelyother participants may bid.

Because business-to-business auctions are conducted for important customcomponents, low bidders may still be “passed over” if other biddersdemonstrate non-price advantages.

Sometimes auctions involve parts that this purchaser has procuredbefore, and are possibly being made currently by one or more suppliers.These would be termed “existing parts.” When a part is currently beingmade by a supplier, that supplier would be termed the “incumbentsupplier.” In an auction situation, the incumbent supplier is placed ina position of having to defend its contract with the purchaser.

Incumbent suppliers are expected to behave differently than outsiders.An incumbent, for example, knows that the buyer's switching costs favorthe incumbent even at a price premium to the market. Because the buyermay pass over low bidders incumbent suppliers can take advantage oftheir incumbent status.

Certain human factors must also be considered when conductingbusiness-to-business auctions for industrial purchasing. If notconsidered, these human factors can interfere with achieving desiredoutcomes. Bidders must be comfortable with the auction software. Biddersoften speak English as a second language, or not at all, making itdesirable to provide interpreters.

Bidders must often respond to multi-million-dollar decisions in a fewseconds. The fast response required creates cognitive limits—a biddercannot realistically focus on more than one decision at a time. Manybidders are under some sort of emotional stress when participating, dueto the change involved. In some cases, incumbent bidders are literally“fighting for their lives” in situations where losing the contract inquestion literally means losing their business.

Problems with Prior Auction Process

The prior auction process described above has been found to producesuboptimal results for buyers in light of the market dynamics issuesidentified above in some circumstances. The problems include: a)multiple lot closing time collisions; b) premature lot closings; c)difficult and inflexible bidding constraints due to lot/line itemstructure; d) possible prejudice to bidders resulting from technicaldisruptions; and e) possible prejudice to bidders resulting fromsubmission of erroneous bids.

The first problem is collision of closing times for multiple lots. Asdescribed above, the initially scheduled closing times for multiple lotsare staggered, so that the lots close at different times, with 10-20minute intervals between lots. This allows suppliers who would like tobid on multiple lots the opportunity to do so, without having to bid oneach lot at the same time. By spacing the closing times for each lot, asupplier knows that while bidding on one lot, the next lot in theAuction will not close. This staggered closing is one way to work aroundcognitive limits—each lot is sequenced so that bidders can pay attentionto one lot at a time.

Overtime delays on an early lot can reduce the time interval before thescheduled closing time of a subsequent lot. In fact, overtime delayshave at times overrun the scheduled closing time of a subsequent lot.This situation begins to tax cognitive limits, and bidding opportunitieson the subsequent lots are often missed. Although this problem might beresolved by spacing market closing times at a substantial distanceapart, experience has shown that even this approach would not besufficient. For example, in one Auction with 2 lots scheduled with 20minutes between closing times, actual bidding on the first lot continuedfor 5 hours and 31 minutes after scheduled close.

The second problem is premature closing of bidding on lots. Just as inan in-person auction, bidding activity tends to increase close to thescheduled closing time. Like the “going, going, gone” auction concept,it is possible to achieve a better auction price if the auction isallowed to continue if bids are still being made. As described above,this concept in implemented through the use of “Overtime,” by which theclosing time of a specific lot is automatically extended based on theflow of bids into the Auction. Overtime prevents bidders from hangingback and submitting last minute bids in an attempt to preventcompetitive reaction.

In the prior system, if a valid, low bid is received in a specified timeinterval before a lot's scheduled closing time, then the closing time isamended (delayed) to give other bidders more time to react to thelate-arriving bid. A bid for second place, something an incumbentsupplier might be expected to do, would not trigger an overtime. Unlikein- person auctions, industrial auctions need to allow second placebids. Thus, it has been found that this is an overly simplistic model,which may still be cutting off bidding too soon. A low bidder needs achance to react to a second place bid, but it cannot if that secondplace bid does not trigger overtime. Therefore, it would desirable to beable to trigger Overtime, or extend Overtime, on the basis of morecomplex bid scenarios.

It has also been found that it would be preferable to have moreflexibility in the operation of overtime. Overtime is currentlyimplemented with fixed offsets between lot closing times, with fixedtrigger time frames (the period before scheduled closing or currentOvertime ending), and fixed extension periods for Overtime. Inindustrial markets, bidding events involve commodities of varyingcomplexity and component packages of different sizes. Accordingly,bidders may need more or less overtime to respond to a bid. The amountof overtime may need to be customized for specific bidding events or forindividual lots within an Auction to obtain the optimal market dynamic.It is therefore desirable to provide more flexibility in Overtime.

Another difficulty encountered by bidders in the prior system is thatbids needed to be made at the line item level. However, the auctiontakes place at the lot level, where all of the line item quotes areadded up to one sum. This dual structure results from the nature of theindustrial market. Price quotations may be built from many cost elementsthat are added up to form price quotes for individual items or groups ofitems. Some cost elements or items within a market may be negotiable andothers may be fixed depending on factors specific to each bidder. Forexample, a fabricator may not have control of raw material costs. Thecompetition for a lot can thus involve many independent and dependentfactors. Bids are placed in real-time and often in rapid successions.This requires bidders to quickly adjust price quotations for an entirelot, even though this lot may be comprised of hundreds of individualitems or cost elements. Initial online auctions only allowed line itemprice adjustments, and it was difficult to fine-tune the mix of bids. Abidder would have to individually adjust line items, while the softwarecalculated new total lot price bids. This was frequently tootime-consuming to keep pace with the auction.

With the time constraints on bidding, bidders wanted the ability to beable to rapidly adjust the lot price without specifically changingindividual line items. Therefore, “pro rata” bid adjustment wasdeveloped. With pro rata bid adjustment, bidders could change the totallot price quote, and the software would apportion pro rata the changeacross individual line items in the lot. However, a pro rataapportionment may result in individual items being priced at levels thatare uneconomic for the bidder. For some items the bidders may wish toset decision rules for adjusting the unit price quotes at the line itemlevel. For example, bidders may wish to lock-in a preset floor orceiling on particular line items within a low. These decision rules, or“locks” cause the pro rata adjustments to be applied selectively insteadof universally.

Another problem that can arise either in regular bidding or in Overtimeis addressing technical disruptions. Real-time technical or operationaldisruptions in the communications network, software or hardware duringthe course of a bidding event may prevent a bidder from fullyparticipating. Disruptions may arise in the online network or due to theequipment used by an individual bidder.

In addition, market events or imperfections may disrupt bidding activityand require communication with bidders before the auction can continue.For example, in one auction bidding for an auction lot commenced and itbecame clear that some of the bidders were including tooling costs andsome were not. The correct assumption was to exclude tooling costs. Inthis example, the bidders needed to be contacted and informed of thecorrection before the auction could proceed with all bidders on an equalfooting.

Other external factors may disrupt the operation of the auction orparticipation by bidders. In another example, a snow storm preventedmany bidders from getting to work on time for the opening of theauction. This was not discovered until many bidders failed to commencebidding.

With a business-to-business transaction, it is typically commerciallyunacceptable for any bidder to be denied full participation. However,where disruptions arise in the course of a bidding event, the biddingactivity and positions of other bidders cannot be prejudiced.Accordingly, market closing times may need to be suspended pending theresolution of a disruption experienced by one or more bidders. This isespecially true where it is not clear how long it will take to resolvethe problems encountered, including whether it will be possible toresolve all problems prior to the close of an auction lot.

Another problem that occurred in the previous system was the submissionof erroneous bids. Bidding errors can happen due to the nature of theonline auction. The pace or intensity of the bidding activity can exceedcognitive limits of bidders. In an effort to keep up, bidders enterincorrect quote amounts. Bidders are frequently interested in bidding onmultiple lots. In the course of monitoring or switching between lots,the bidder erroneously enters a bid intended for Lot A into Lot B.

In the industrial market, the stakes can be quite large, with contractsawarded for millions of dollars and for contracts that can last forseveral years. Therefore, the suppliers that would be incurred byhonoring an erroneous bid is substantial.

In an online industrial auction, an incorrect bid can upset the biddingbehavior of other bidders creating inequity for all participants in themarket. All bidders in the marketplace view market conditions based onbids placed by other bidders, and respond. They do so relying on theimplicit assumption that all bids are valid. If one of the bids is madein error, and the other bidders proceed to bid in response, theintegrity of the auction is damaged. This can result in sub-optimalresults for both buyers and suppliers.

SUMMARY OF THE INVENTION

The problems encountered with the operation of the prior auction systemare overcome by the auction system of the invention, which enablesflexible dynamic alterations of market closing times, line item decisionrules, auction pause, bidder-specific bid limits, and the ability todetect and prevent erroneous bids.

The amount of overtime added each time a relevant new bid is receivedcan be adjusted to suit the complexity and size of the market lotsinvolved in the bidding event. This permits bidders to have moreovertime to respond to each new bid if the commodity complexity ormarket lot size require additional bid calculation time.

The trigger for additional overtime can be flexibly set to include arange of behind-market bidding activity. The type of behind-marketactivity that would trigger additional overtime includes bids or biddersof a defined rank behind market and bids of a defined absolute orrelative (percentage) quantity behind the market. Additional triggerparameters can also be flexibly created to suit particular industrialmarkets. This ensures that extra overtime is triggered when certain bidsupset the market dynamic.

In multi-market, or multi-lot bidding events, where prior market lotsrun into overtime, the closing times of subsequent market lots aredynamically altered during the course of an event to maintain a minimumtime period between market closings. When market closings have beenaltered to accommodate this market dynamic, the market status isreferred to as “Extended.” This ensures that markets do not “collide” orrun on top of one another when overtime from an earlier market lotcontinues past the scheduled closing time for a subsequent market lot.Bidders are guaranteed that markets close one at a time, so they are notplaced in the position of having to bid for different market lots at thesame time.

Once bidding activity has ceased, a lot is placed into “Pending” statusprior to closing the lot. The lot closing time can be dynamicallyaltered to meet the time period required to resolve any technicaldisruptions experienced by bidders. From Pending status, lots can be setto automatically close after a predefined period of time has elapsedwith no technical disruptions reported by bidders, or the lot can bemanually closed or held in pending status. Following the resolution of atechnical disruption a lot can be returned to “Open” status for allparticipants to allow bidding activity to continue. Pending status willthen be used again to dynamically alter lot closing times until allbidders have fully participated with no technical disruptions. Thisensures that all bidders may place all bids irrespective of anytechnical disruptions that occur during the event without prejudicingthe positions and bidding activity of other bidders. “Pause” statusensures that disruptions to an auction can be dealt with equitablywithout prejudicing existing bidding activity or positions achieved bybidders. Auction Pause allows the auction coordinator to indefinitely“freeze” an auction without disrupting the bids placed before the pausewent into effect. The Pause status can be applied to an entire auction(all lots) or to specific lots within an auction. The Pause status canbe applied at any time during an auction and will override any otherstatus currently in effect. In one embodiment, no bidder is able tosubmit bids while the auction is in Pause status. In an alternateembodiment, bids may continue to be received but would not be enteredinto the auction. In this embodiment, bids could be held in a queueawaiting entry upon the removal of the Pause status.

Flexible bidder-determined line item decision rules for bidding permitsbidders to set specific price decision rules for aspects of individualline items within a lot. For example, price limits for line items can beestablished at the initial price quote entered for that item or at afloor or ceiling above or below the initial quote. Different decisionrules can be set for different items and rules can be set across some orall of the line items within a lot. Decision rules can be setdynamically during the course of the bidding event by the bidder.

Flexible line-item decision rules enable bidders to lock-in a fixed andvariable portion of the price quote prior to the bid. Total bids for alot can then be adjusted rapidly in response to market activity withoutchanging individual line item quotes to uneconomic levels. In addition,bidders have the comfort of setting floors or ceilings on individual orcost component bids. During the bidding event, fixed components can bereevaluated and unlocked if necessary in response to movements in themarket beyond original expectations. This bidding flexibility allowsbidders to participate in the auction fully, and increases competition.

Bidder-specific bid rules enable an auction coordinator to maximize thecompetitive nature of an auction. In a downward auction, each bidder isassigned an individual bid ceiling by the buyer. This bid ceiling sets amaximum bid price that can be submitted by a supplier. The bid ceilingsare advantageous to the buyer because it prevents a bidder fromwithholding pre-auction bids from the market.

The ability to detect, prevent and remove erroneous bids ensures thaterroneous bids can be dealt with equitably without prejudicing otherbidders or interrupting the auction. A confirmation box is presented tothe bidder to confirm the amount of a bid to be entered. All bids mustbe checked and confirmed before they will be submitted to the auctionserver. Predefined “failsafe” rules allow the bidder to limit bids to acertain range. If during the course of an auction, the bidder bidsoutside that range, additional bid confirmations may be required, or thebidder may be prevented entirely from entering bids that fail “failsafe”criteria. The auction coordinator may override or remove erroneous bidsfrom the auction in real-time. Bids can be quickly and efficientlyremoved before it prejudices the positions of other bidders and prior tolot closing.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a schematic illustration of the elements and entities involvedin an auction process.

FIG. 2 is a schematic illustration of the tasks performed by theentities involved in an auction process.

FIG. 3 is a schematic illustration of the communications links betweenthe coordinator and the potential suppliers in an Auction.

FIG. 4 is a schematic illustration of the client and server componentsof the computer software application that conducts the Auction and thehardware at the sites of the coordinator and the potential suppliers onwhich the client and server components operate.

FIG. 5 is a schematic illustration of the possible bidding states in theprior auction system.

FIGS. 6A-6D illustrate the information displayed by the clientapplication in the prior auction system at various times during a sampleAuction.

FIGS. 7A-7B illustrate the change in bidding status of one lot in theAuction illustrated in FIGS. 6A-6D.

FIG. 8 illustrates a series of bids submitted on one of the lots duringthe Auction illustrated in FIGS. 6A-6D.

FIGS. 9A-9B illustrate the changes in bidding status and closing timesfor multiple lots using the dynamic lot closing extension feature.

FIG. 10 is a schematic illustration of the possible bidding states inthe auction system.

FIG. 11 is a flow chart illustrating the operation of the dynamic lotclosing extension feature.

FIG. 12 is a flow chart illustrating the operation of the flexibleovertime feature.

FIG. 13 is a flow chart illustrating the operation of the pendingfeature.

FIG. 14 is a flow chart illustrating the operation of the failsafe errordetection features.

FIGS. 15A-15C illustrate error detection warning and confirmationmessages.

DETAILED DESCRIPTION

The auction method and system of the invention are described below.Seven aspects of the system and method are described: a) dynamic lotclosing extension; b) flexible overtime; c) flexible bidder-determinedline item decision rules; d) pending status; e) bidder-specific bidlimits; f auction pause; and g) error detection and prevention.

Dynamic Lot Closing Extension

The problem identified above of multiple lot closing collisions isaddressed with the dynamic lot closing extension feature. This featureinvolves rescheduling, or extending, the closing time of a subsequentlot when the closing time of a preceding lot is extended to the pointwhere it becomes unacceptably close in time to the subsequent lot'sthen-scheduled closing time. Thus, this feature involves adding a ruleto the lot closing determination that can be stated as: “Maintain aminimum time interval between the closing time of one lot and theclosing time of the next subsequent lot.” This feature is illustratedwith reference to FIGS. 9A-9B.

FIG. 9A illustrates a time line divided into time intervals of Δtbetween times t1, t2, etc. The scheduled bidding periods for two lots inthe Auction are times t1 (the opening time for the Auction) through t6(the initially scheduled closing time) for Lot X, and time t1-t11 forLot Y. As described above with reference to the prior system, thescheduled closing times t6 and t11 are staggered to permit potentialsuppliers to focus their attention on bidding on a prior lot (Lot X)before it closes, then to turn their attention to bidding on asubsequent lot (Lot Y) with adequate time before it closes. The timeinterval between the initially-scheduled closing times t6 and t11 isfive time increments Δt. The minimum time interval that is to bemaintained between the closing time is three time increments Δt.

FIG. 9B shows the changes of status of various parameters in the auctionas bids are received. FIG. 9B identifies the time interval during whichthe bid is received, the bidding status of Lot X before and after thebid is received, the bidding status of Lot Y before and after the bid isreceived, the closing time of Lot X before and after the bid isreceived, and the closing time of Lot Y before and after the bid isreceived.

The Auction begins at time t1. At the beginning of the Auction, andduring the initial course of bidding, both lots have a bidding status“Open.” During the course of bidding, a bid submitted on Lot X cantrigger an extension of Lot X's closing time (e.g. a new market bidsubmitted within a predetermined amount of time before the closingtime). Thus, bids A and B do not change the bidding status of Lot X orthe closing times of the lots, because they are not received within atrigger period before the scheduled closing time of Lot X (in thisinstance, the trigger period is one interval Δt). However, bid C, whichis a new low bid received within the time interval t5-t6 (within Δt ofclosing time t6), triggers “Overtime” for Lot X. This is reflected inFIG. 9B, which indicates that the bidding status of Lot X was “Open”before the bid and “Overtime” after the bid. The scheduled closing timefor Lot X is extended by an Overtime interval (defined in this exampleto be one interval Δt) from t6 to t7. Since there are still three timeintervals Δt between the closing time of Lots X and Y (t7-t11), there isno change to the closing time of Lot Y.

When Bid D is received, the status of Lot X remains “Overtime,” butbecause it was received within one increment Δt of the then-scheduledclosing time t7, the scheduled closing time is further extended by oneincrement Δt to t8. Again, there are still at least three intervals Δtbetween the lots' closing times (t8-t11) so there is no effect on theclosing time of Lot Y.

When Bid E is received, both the bidding status and the closing time ofLot X are unaffected, because the bid is received more than one intervalbefore the scheduled closing time t8.

Finally, when Bid F is received in the interval between t7 and t8, theclosing time for Lot X is extended by another increment Δt to t9.Because this extension in Lot X's closing time would reduce the intervalbetween the lots' closing times to below the minimum interval of threeΔt's, Bid F triggers Lot Y to change status from Open to Extended, andextends the closing time for Lot Y to t12.

The Extended status can be applied to more than one subsequent lot .Thus, if the rescheduled closing time for the first lot reduces theinterval to the second lot's closing time to less than the minimuminterval, and the second lot's closing time is therefore extendedsufficiently long that it in turn is too close to the scheduled closingtime of a third lot, the third lot's closing time is in turn extended tobe at least the minimum interval beyond the second lot's closing time.

Flexible market closing extensions is implemented in the auction systemby storing a parameter in storage 22B that specifies the minimuminterval between lot closings (see FIG. 4). This parameter is read fromstorage 22B into memory 22A for use by the server component of theapplication software when an Auction is loaded. When the closing timefor a given lot is adjusted, the closing time for the immediatelysubsequent lot is evaluated to determine whether the time intervalbetween the adjusted closing time and the subsequent lot's closing timeis smaller than the minimum interval between lot closings specified. Ifit is, the subsequent lot's closing time is adjusted so that thedifference between the two equals the minimum interval. If it is not, noadjustment is made to the closing time of the subsequent interval.

In an alternative embodiment, multiple parameters are stored in storage22B. These multiple parameters specify the individual minimum intervalsbetween the closing times of the multiple lots. The individual minimumintervals can be based upon the characteristics of the lot itself orvarious indicia reflective of the market activity for the lot. Theindividual minimum intervals can therefore be dynamic in nature.

The operation of the flexible market closing extensions feature isillustrated in the flow chart of FIG. 11. The process for dynamicallyextending the closing time of multiple lots is shown as process 500. TheAuction continually receives bids at step 510 until a predeterminedinterval of time before the scheduled closing time (the closing triggerinterval). This is shown by the step 510-step 520 loop. At the closingtrigger interval time, the software checks to see if any trigger bidshave been made at step 530. For example, if the closing time interval is2 minutes, then at 2 minutes before the scheduled closing of the lot,the software will check to see whether any trigger bids have been made.

If no trigger bids have been made, the software checks to see whether itis closing time at step 540 before continuing to accept bids at step510. The step 510-step 520-step 530-step 540 loop may occur many timesduring the closing time trigger interval. If no trigger bids arereceived during this time, then the lot closes at step 550 at thescheduled closing time.

If there is a trigger bid received during this time, then the processcontinues to step 560, where an Overtime interval is added to thescheduled closing time for that lot. The software then checks theclosing time of the subsequent lot in step 570. A comparison is made instep 580 to determine if the closing time of the subsequent lot needs tobe dynamically altered. If the interval of time between the scheduledclosing time of the Overtime lot and the scheduled closing time of thenext lot is greater than or equal to the minimum lot closing interval,then no extensions are necessary, and the process returns to step 510,where bids for the current lot are again received.

If the interval of time between the newly scheduled closing time of thecurrent lot and the scheduled closing time of the next lot is less thanthe minimum closing interval, then the next lot needs to be extended tomaintain the minimum closing time interval. This occurs in step 590.

If the next lot has to be extended, there is a chance, after multipleextensions, that it will run into the lot following it. Therefore, loop590-570-580 is processed to check subsequent lots, and extend them ifnecessary, to maintain the minimum closing interval between each lot.This loop is executed until all lots as necessary have been extended tomaintain the minimum closing interval, at which point, bids for thecurrent lot are again received at step 510.

Flexible Overtime

As described above, the prior auction system employed a simple, staticmodel for Overtime, in which Overtime was triggered by a new low bidsubmitted within a predetermined time interval before a scheduledclosing time, and the scheduled closing time was extended by apredetermined time period. This rule can be articulated as: “amarket-setting low bid, received in the appropriate increment Δt beforea scheduled closing triggers overtime and adds an increment Δt to thescheduled closing time.” This Overtime rule was applied to all Auctions,to all lots in an Auction, at all times during an Auction. The flexibleovertime feature of the present auction system addresses theshortcomings of the prior static overtime feature.

Flexible overtime has two aspects: variable duration of overtimeintervals and variable overtime triggers. The variable duration aspectinvolves overtime extension intervals (time intervals by which ascheduled closing time, whether an initially-scheduled time or anextended time, is extended) and overtime trigger intervals (intervalsbefore a scheduled closing time in which a bid meeting defined criteriawill trigger overtime). These intervals can be the same (as in the priorsystem), or can be different from each other. The intervals can vary inlength from lot to lot. Thus, the first lot might have an overtimeextension interval and an overtime trigger interval of 1 minute, while asecond, more complex or significant lot might have intervals of 2minutes.

The second aspect of flexible overtime is variable overtime triggers.The trigger for each lot is bid-related, in that it involves anevaluation of some attribute or attributes of a bid against one or moretrigger criteria. In the prior system, the attribute of a bid that wasevaluated was the price of the bid with respect to the current best(lowest priced) bid. Overtime was triggered if the price of a new bidsubmitted within the appropriate interval was lower than the currentbest bid. In the disclosed auction system, overtime triggers can bebased on other parameters and criteria. For example, the rank of a bidcan be considered, and overtime triggered based in part on whether therank of the bid is lower than the established criterion. Thus, thecriterion can be established that a trigger bid must be a bid that is anew best bid or is the second or third best bid.

A further possible criterion, which can be applied in tandem with orindependent of the ranking criterion, is that the bid must besufficiently close to the best bid in terms of some parameter ofquality. For the simplest bid evaluation, the parameter of quality for abid is the bid price (e.g. in dollars). The criterion can be establishedthat a trigger bid must have a price that is lower than, or higher thanbut within a predetermined absolute or percentage difference from, thecurrent best bid.

Thus, decision rules for overtime triggering can be defined in differentways, such as:

A bid within 2% of the price of the then-low bid, if received within theappropriate time interval before the scheduled close time, triggersovertime

Any bid, if received in the appropriate interval before a scheduledclose, triggers overtime

A bid by a supplier identified to the server as an incumbent supplier,if received in the appropriate time interval before a scheduled close,triggers overtime.

It might also be desirable to include the option to vary the overtimeextension interval dynamically during the course of the Auction.

It should be noted that an overtime trigger can also be based uponevaluations of the characteristics of a subgroup or the entire group ofbids (e.g., increase in frequency of bids, statistical analysis of bidvalues for entire group or particular supplier). As a general rule, theovertime trigger seeks to extend the auction for a lot if there is anyindication that further bidding would somehow be advantageous to thebuyer.

Flexible overtime can be implemented in the illustrated auction systemin a variety of ways. In one embodiment, a parameter is stored instorage 22B that specifies the length of the overtime period for eachlot. This parameter is read from storage 22B into memory 22A for use bythe server component of the application software when an Auction isloaded. When overtime is triggered on a given lot, the server componentadds the value of that lot's overtime parameter to the market closingtime, adjusting its closing time accordingly.

Second, flexible overtime triggers are implemented by storing twoparameters (in the same manner as the other parameters above): one thatspecifies the market rank necessary for a bid to trigger overtime andone that specifies a maximum distance, expressed as either a percentageor a nominal value, that a bid can be from the market-leading bid totrigger overtime. Each bid received is evaluated against theseparameters to determine whether overtime should be triggered.

In an alternate embodiment, flexible overtime triggers are implementedby writing a specific module of code for each lot and referencing thatcode by the server component each time a bid is entered. The code moduletakes as input parameters such as the current bid, the next closest bid,the current bid time, the next closest bid time, the current low bid,the low bid time, the then-scheduled close time, etc. Using logic thatcan be tailored to each lot, the code module returns a value of “true”if that bid should trigger an overtime, or “false” if it should not.

The operation of the flexible overtime feature is illustrated in theflow chart in FIG. 12 for process 600. Bids are received at step 610until it is closing time for the current lot. In step 620, adetermination is made whether the current bid was submitted during aclosing time trigger interval (i.e. in the trigger interval before thecurrently-scheduled closing time). If not, the process loops back tostep 610 until the next bid is received. If so, the bid is thenevaluated at step 630 to determine if it is “better” (by whateverquality parameter is selected, such as price) than the current best bid.If so, then the process goes to step 640, where the best bid is setequal to the current bid. Under the rule set implemented in thisembodiment, a new best bid in the overtime trigger interval alwaystriggers overtime—the process therefore proceeds to step 670, whereovertime is initiated (or extended). If the current bid is not betterthan the best bid, the process proceeds from step 630 to step 650, wherethe determination is made whether the bid otherwise meets the overtimetrigger criterion. In this case, the test is whether the bid is withinsome predetermined amount of a selected quality parameter (e.g. price)of the best bid. If it is, overtime is triggered (or extended). If not,the process loops back to step 610 to receive the next bid.

Flexible Bidder-Determined Line Item Decision Rules

This bidding feature of the auction system of the invention provides amethod for allowing bidders to bid at the lot or line item level, whilemaintaining flexible decision rules on individual line items. Generally,a flexible line-item decision rule enables a buyer to automaticallyadjust aspects of line item level bids based upon one or more inputs atthe lot or line item level.

In one embodiment, a flexible line-item decision rule is implemented bycreating fixed and variable components of a bid on each of the lineitems that comprise a lot. Limits for individual items can beestablished at the initial price quote entered for that item or at afloor or ceiling below or above the initial quote. Different limits canbe set for different line items and limits can be set across some or allof the items or components within a lot or market.

When bids are decreased at the lot level, the amount by which they aredecreased at the line item level is pro rated across the unlockedportion of the line item price bids. Pro rata adjustments will notaffect the locked (or fixed) component of the line items. Thus, thelocked portion remains unchanged. However, limits can be locked andunlocked dynamically during the course of an Auction by the bidder.

This particular flexible line-item decision rule allows bidders to lockin a fixed and a variable portion of the price quote prior to the bid.Total bids for a lot can then be adjusted rapidly in response to marketactivity without changing individual item quotes to uneconomic levels.Further, bidders have the comfort of setting floors or ceilings on allor part of individual line item bids. During the Auction, fixedcomponents can be re-evaluated and unlocked if necessary in response tomovement in the market for the lot beyond original expectations.

In a case where a total bid is decreased by more than the sum of allunlocked line item bids, the bid is rejected. Therefore, a total bidwill never be less than the sum of the locked portion of the line itembids. Items can be locked or unlocked at any time during the biddingevent.

An example of the Lock/Unlock feature is shown below. Initially, lineitem 1 is partially locked and line item 2 is entirely unlocked.

Line Item Locked Unlocked Total Price 1 $1.00 $9.00 $10.00 2 $0.00$20.00 $20.00 $30.00 Lot Price

The bidder chooses to drop the lot price, by 10% (or $3). The $3adjustment is then apportioned on a pro rata basis to the unlockedportions of the individual line item bids. In this case, line item #1 isreduced by $0.93 (i.e., $3×9/29), and line item #2 is reduced by $2.07(i.e., $3×20/29). The result of these pro rata line item adjustments isreflected by the following:

Line Item Locked Unlocked Total Price 1 $1.00 $8.07 $9.07 2 $0.00 $17.93$17.93 $27.00 Lot Price

The locked/unlocked feature is implemented in the auction system by datastructures maintained in the client software that support capture oflocked and unlocked unit price bids at the line item level and byproviding a user interface to accept the locked/unlocked informationfrom the bidder.

It should be noted that the locked/unlocked feature represents only oneexample of a flexible line-item decision rule that can be implemented.Generally, a line item bid can be adjusted based upon one or morechanges at the lot or line item level. These flexible line-item decisionrule can be created to accommodate any pre-auction bidding strategy thatcould be jeopardized by the bidders interaction in a real-time auctionevent. For example, a customized flexible line-item decision rule can becreated such that the price of a first line item maintains a specifiedproportion to the price of a second line item. This particular flexibleline-item decision rule may be important where the bidder must ensurethat one or more particular line item bids conform to internal corporateguidelines (e.g., marketing, accounting, sales, etc.). More generally,it is contemplated by the present invention that any aspect of a lineitem bid (e.g., unit price, quantity, delivery time, line itemcharacteristic, etc.) can be related to, and thereby adjusted, basedupon a change in one or more aspects of the supplier's bid at either thelot or line item level.

Pending Status

The pending status feature of the auction system of the inventionprovides an intermediate bidding status for each lot to transition thelot from a status in which bids can be submitted (Open, Overtime,Extended) to a status in which bids will no longer be accepted (Closed).The intermediate bidding status is “Pending.” This status indicates thatbids are not being accepted on the lot but that the lot may subsequentlybe returned to Open status for bidding. This allows a time period for abidder who has missed an opportunity to bid because of a technical fault(e.g. communications or computer hardware or software failure) tocontact the coordinator to alert the coordinator to the fault. Thecoordinator can then evaluate the asserted fault and determine whetherit is appropriate to allow further bidding on the lot. If so, the lotcan be returned to Open status for bidding. If not, the lot is Closed.The lot can be returned to Open status immediately upon thedetermination by the coordinator that this is appropriate, or it can beheld in Pending status while a convenient time to re-open is scheduled.

Pending status is implemented in the illustrated auction system bystoring two parameters in storage 22B: one parameter that specifies thelength of the pending interval and one that specifies whether a lotshould automatically close when that interval expires. The lengthparameter can be set differently for each lot. These parameters are readfrom storage 22B into memory 22A for use by the server component of theapplication software when an Auction is loaded. When the scheduledclosing time for a lot is reached, the bidding status is set to“Pending” instead of “Closed.” If the automatic close flag is set to“YES”, then a clock begins to count down the pending interval. If noother intervention takes place and the pending interval expires, thenthe lot is closed automatically. If the automatic close flag is set to“NO,” then the lot will remain in the Pending status until manualintervention takes place. Manual intervention in either case can takethe form of changing the automatic close flag (either from NO to YES orfrom YES to NO), returning the lot to open status and setting a newclose time, or manually closing the market.

The operation of the pending status feature is illustrated in the flowchart of FIG. 13, as shown in process 700. Bids are received at step 710until it is closing time for the current lot at step 720. Although notshown in FIG. 13, this process can include Overtimes and Extensions asdescribed above. At the actual lot closing time, the software sets upfor processing the pending status at step 730. Here Status is set to“Pending”, the Auto_close flag is set to YES and the pending clock isstarted (pending_time=maximum pending time).

At this point, if no external events occur, the lot will remain in thePending state through the pending time, and then become Closed. This isreflected through steps 750-780-785-760-770. The step 750-step 780 loopis executed throughout the pending period until pending_time is 0, atwhich point step 760 is executed. Nothing has occurred that would changethe value of Auto_close, so it is still YES, therefore step 770 will beexecuted, and the lot closes.

One external event that can occur is a bidder calling the coordinatorduring the Pending period to communicate problems that occurred duringthe bidding for that lot. If this happens, the coordinator manuallychanges Auto_close to NO in external event step 740. This will notaffect anything in the loop 750-780—the software continues to check thestatus during the pending time, but not the Auto_close flag. At the endof the pending time, step 760 is executed. This time, since Auto_closewas changed to NO by the coordinator, the process loops back to step780, where the status is checked. The loop 750-760-780 will be executedrepeatedly until the coordinator manually changes either the Auto_closeflag or the Status. If after investigation, it turns out that thebidding does not need to be returned to open status, then thecoordinator can change the Auto_close flag back to YES 744, and theprocess will exit the loop at step 760, going to step 770, and closingthe lot. If after investigation it is decided that the bidding should bereopened for that lot, the coordinator can manually change the status toOPEN. After the status is changed, the loop will exit at step 780, goingto step 790. The closing time for this lot will be adjusted to a newscheduled closing time, and the Auction will start receiving bids againfor that lot at step 710. The entire process 700 is repeated.

Bidding Statuses

The possible bidding statuses for the present auction system and methodare identified in FIG. 10. In addition to the statuses identified inFIG. 5 for the prior auction system, the present system includes thestatuses of Extended and Pending. As shown in FIG. 10, a lot can changefrom Open status to Overtime, Extended or Pending. A lot can change fromOvertime to Pending status. Further, a lot can change from Pending toOpen or Closed status.

Auction Pause

Auction Pause allows the auction coordinator to indefinitely “freeze” anauction, without disrupting the bids placed before the pause went intoeffect. The pause status can be applied to an entire auction (all lots)or to specific lots within an auction. The Pause status can be appliedat any time during an auction and will override any other statuscurrently in effect. While in Pause status, all existing bids arepreserved. An entire auction (or individual auction lots) can be held inPause status for an indefinite period of time. In one embodiment, nobidder is able to submit bids while the auction is in Pause status. Inan alternate embodiment, bids may continue to be received but would notbe entered into the auction. In this embodiment, bids could be held in aqueue awaiting entry upon the removal of the Pause status.

The auction coordinator determines the lot status that applies once thepause is removed. While in Pause status, the auction server clock willcontinue to operate. Hence, without any intervention by the auctioncoordinator, the lot status that applies once the pause is removed willbe the lot status that would have been in effect in the normal course ofoperations had it not been for the pause (the underlying status). Forexample, if the scheduled lot closing time passes while the lot is inpause, and the auction coordinator lifts the pause status, the auctionlot will return to “Closed” status. However, the auction coordinator canalter the scheduled timing that applies to all lots (i.e. alter theopening and closing times) to ensure the correct lot status applies oncethe pause is removed. Thus, all bidders see the auction server clockmatch the correct time while the auction coordinator can achieve anyrelevant lot status once the pause is removed.

For example, as shown below in Table 1, an online auction is scheduledto open at 9:00 am at which time all lots will open. Current time is8:45 AM so all lots are currently in Available status.

TABLE 1 Current Time: 8:45:52 AM Lot # Lot Name Opening Time ClosingTime Status 1 Screws 9:00:00 AM  9:30:00 AM Available 2 Nuts 9:00:00 AM10:00:00 AM Available 3 Bolts 9:00:00 AM 10:30:00 AM Available

Suppose there is a technical disruption at 8:50 AM and the auctioncoordinator is not sure how long it will take to resolve the issue.Instead of canceling the auction, the auction coordinator places theentire auction in Pause status. The auction now appears as shown inTable 2.

TABLE 2 Current Time: 8:50:31 AM Lot # Lot Name Opening Time ClosingTime Status 1 Screws 9:00:00 AM  9:30:00 AM Pause 2 Nuts 9:00:00 AM10:00:00 AM Pause 3 Bolts 9:00:00 AM 10:30:00 AM Pause

The technical disruption is resolved at 9:32 AM. At this point, if theauction coordinator lifted the Pause status, Lot 1 would immediately goto Pending and then to Close three minutes later. (In this example, thepending interval has been set to a total of 5 minutes after scheduledclose by the auction coordinator.) Bidders would therefore not have anopportunity to place bids for Lot 1. To avoid this outcome, the auctioncoordinator decides to alter the opening times for all lots to 9:45 AMand shift the closing times to 30-minutes intervals thereafter. Once thePause is lifted, this has the effect of returning all lots to Availablestatus, and bidders can commence bidding when the lots open at 9:45 AM.The auction now appears as shown in Table 3. Note that the auctioncoordinator could also have shifted the closing times only. In thatcase, all lots would have gone to Open status and bidders could havecommenced bidding immediately.

TABLE 3 Current Time: 9:32:22 AM Lot # Lot Name Opening Time ClosingTime Status 1 Screws 9:45:00 AM 10:15:00 AM Available 2 Nuts 9:45:00 AM10:45:00 AM Available 3 Bolts 9:45:00 AM 11:15:00 AM Available

Bidding begins on all of the lots at 9:45 AM. Then a second technicaldisruption occurs at 10:10 AM. This interruption is estimated to take atleast 10 minutes to resolve, which will not be fast enough to preventLot 1 shifting to Pending status at 10:15 AM and Closed status at 10:20am (assuming a 5 minute Pending interval). In addition, since all lotsare currently open, bids have already been placed on Lots 2 and 3. Asthe duration of the interruption is unknown, the auction coordinatordecides to once again place all lots in Pause status until the technicaldifficulty is resolved. Bidders are prevented from entering bids duringthis time or bids may be placed into a queue to await the lifting of thePause status, but all existing bids are preserved. The auction nowappears as shown in Table 4.

TABLE 4 Current Time: 10:10:09 AM Lot # Lot Name Opening Time ClosingTime Status 1 Screws 9:45:00 AM 10:15:00 AM Pause 2 Nuts 9:45:00 AM10:45:00 AM Pause 3 Bolts 9:45:00 AM 11:15:00 AM Pause

The technical disruption is resolved at 10:30 AM. The auctioncoordinator alters the closing times (but not the opening times) of thelots to give the bidders an additional 10 minutes to bid on Lot 1, andto space out the closing times of Lots 2 and 3 at 20 minute intervals.The auction coordinator does not change the opening times of the lots,and therefore preserves bids that have already been made. All lotsreturn to Open status when the Auction Pause is lifted and may commencebidding immediately. The auction now appears as shown in Table 5.

TABLE 5 Current Time: 10:30:25 AM Lot # Lot Name Opening Time ClosingTime Status 1 Screws 9:45:00 AM 10:40:00 AM Open 2 Nuts 9:45:00 AM11:00:00 AM Open 3 Bolts 9:45:00 AM 11:20:00 AM Open

Bidding continues on Lot 1 until 10:55 before the final bid is placedand the lot shifts to Pending status (i.e. 15 minutes of Overtime).Assuming a minimum interval of 10 minutes between lot closing times,this will push Lot 2 into Extended status moving the scheduled closingtime back to 11:05 AM. The auction now appears as shown in Table 6.

TABLE 6 Current Time: 10:55:07 AM Lot # Lot Name Opening Time ClosingTime Status 1 Screws 9:45:00 AM 10:55:00 AM Pending 2 Nuts 9:45:00 AM11:05:00 AM Extended 3 Bolts 9:45:00 AM 11:20:00 AM Open

Now it is discovered that some, but not all, of the bidders on Lot 2have made an incorrect assumption in preparing their quotes. The auctioncoordinator needs time to communicate with all bidders and correct theerror, and estimates that this will require 10-15 minutes. Therefore itwill take too long to give all bidders an equal chance of understandingthe situation before Lot 2 closes. However, there is no disruption toLot 3, which can continue as scheduled. The auction coordinator placesLot 2 in the Pause status, and changes the scheduled closing time forLot 2 to 11:40 AM. No change is made to Lot 3. Bidding continues on Lot3, but no bids can be placed on Lot 2 at this point. Lot 2 is nowscheduled to close after Lot 3. The auction now appears as in Table 7.

TABLE 7 Current Time: 10:56:12 AM Lot # Lot Name Opening Time ClosingTime Status 1 Screws 9:45:00 AM 10:55:00 AM Pending 2 Nuts 9:45:00 AM11:40:00 AM Pause 3 Bolts 9:45:00 AM 11:20:00 AM Open

By 11:17, all of the bidders have received the correct information forLot 2 and re-calculated their bids. At this point, the Lot Pause can belifted from Lot 2. Although bidders are now engaged in the activityleading up to the close of Lot 3, the lot extension buffer will ensurethat bidders have adequate time to return to Lot 2 once Lot 3 biddingends. The auction now appears as shown in Table 8.

TABLE 8 Current Time: 11:17:22 AM Lot # Lot Name Opening Time ClosingTime Status 1 Screws 9:45:00 AM 10:55:00 AM Closed 2 Nuts 9:45:00 AM11:40:00 AM Open 3 Bolts 9:45:00 AM 11:20:00 AM Open

The lot statuses will now follow their normal procedures through to theend of the auction.

Bidder-Specific Bid Limitations

It is common for sellers (upward auctions) and buyers (downwardauctions) to place market limitations on the amounts that bidders maysubmit as valid bids during the course of an online auction. Forexample, a buyer may require that bidding start below a certain ceiling.In this case, the buyer is not interested in making a purchase at anyprice above that limit, and bids submitted above that ceiling are notaccepted. Such a limitation applies across the board to all potentialbidders (suppliers).

Use of a market-wide bid limitation is inadequate where the buyer canobtain some form of price discovery with respect to individual biddersprior to the online auction. For example, it is not uncommon inindustrial procurement for the buyer to receive bids from potentialsuppliers prior to an online auction. The buyer may have solicited a“first round” of bids (“pre-bids”) prior to deciding to conduct theonline auction, or a series of bids may arrive without solicitation fromthe buyer. At this point, the buyer has three options for conducting theonline auction:

A first option is to set a ceiling at the highest pre-bid. In this case,suppliers who submitted lower pre-bids prior to the online auction maycommence bidding at a level higher than their pre-bids. During thecourse of the event, the bidding activity may not reach the level of thelowest pre-bid. This could occur for one of two reasons.

First, since the pre-bids are still valid quotations, and there ends upbeing little competition from other suppliers, the leaders may feel noneed to bid online at all until the market approaches the value of theirpre-bids. This is a situation unique to auctions in industrial marketswhere the buyer can award to a non-low bidding supplier (switching costsand non-price variables establish “stickiness” in bidding behavior).Without the leaders bidding at all, there may not be enough competitionto drive the online auction to its potential. Possibly, no new bids willbe received online at all. The buyer in this case has lost the potentialfor the interactivity of the auction to produce a better result.

Second, if the rules of the online auction require the buyer to foregothe pre-bids (for example, to avoid the problem described in (a)), thenthe leaders can start much higher than their pre-bids. In fact, the lowbidding pre-bidder only needs to bid slightly lower than second place.If there was a significant gap between the pre-bids in first and secondplace, the leader may never be driven to bid online nearly as low as thepre-bid. The buyer will experience regret at not having taken theoriginal low bid.

A second option is to set a ceiling at the lowest bid. In this case,some suppliers may be prevented from bidding because they cannot meetthe ceiling. This does not matter if the buyer is indifferent over whichsupplier to award to (the buyer awards to the lowest bidder either atthe ceiling or the market price if bidding goes below the ceiling).However, in industrial business-to-business auctions it is not uncommonfor the buyer to choose a non-low bidding supplier (switching costs andnon-price variables affect the final decision). Many suppliers who didnot have the lowest bid prior to the online auction may want to reducetheir bid to close the gap on the lowest placed bidder. They may not beable to match the lowest bid, but they may be able to improve theirposition. However, the ceiling in the online auction prevents them frombidding at all. Thus, the buyer loses the benefit of receiving thelowest bid possible from such suppliers.

A third option is to set a ceiling somewhere between the lowest andhighest bid. Now the buyer is exposed to both of the problems outlinedabove, and must “second guess” the bidders as to the “best” level to setthe ceiling. Note that this is a problem unique to industrialbusiness-to-business markets. In most other auction situations, themarket-leading bid automatically wins, and setting the ceiling at thelowest bid would be perfectly acceptable. It is only because of the factthat the buyer can award to any participant in the market, and mayprefer a supplier who is not the lowest, that this problem arises.

The bidder-specific bid limitations feature addresses the shortcomingsof market-wide bid ceilings. With this feature, an online auction canset up such that individual bidders have different limits on the bidsthat will be accepted during the course of the auction. For an upwardauction, the seller may set different floor prices for differentbidders. For a downward auction, individual ceiling prices can beestablished for bidders. This avoids the “buyer's (or seller's) regret”associated with the market-wide bid limitations described above.

Consider the following example illustrated in Table 9. In this example,the buyer had collected a “Round 1” series of pre-bids (in confidence)which are listed below in Table 9.

TABLE 9 Historic Price = $10,564,300 Actual Online Auction Results(w/Bidder-Specific Pre-bid Results Bid Limitations) Savings Savings RankBidder Bid (%) Bidder Bid (%) 1 Supplier A $8,515,383 19.4% Supplier A$8,352,524 20.9% 2 Supplier B $9,129,639 13.6% Supplier B $8,463,76919.9% 3 Supplier C $9,635,396  8.8% Supplier C $8,674,775 17.9% 4Supplier D $10,289,320   2.6% Supplier D $9,465,808 10.4%

While the bids from Suppliers A and B were more attractive, the buyeractually preferred to deal with either Supplier C or D, who would notlower their price any further through manual negotiation. The buyerdecided to hold an online auction but wanted to ensure that supplierswould not start bidding higher than their pre-bids. Since the bids werereceived in confidence (as is often the case), the buyer could notsimply enter opening bids equal to their previous best “on behalf” ofthe suppliers.

An online auction is then conducted on the basis that the pre-bids wouldbe foregone, and only a supplier who participated in the online auctionwould be awarded the business. Accordingly, all suppliers would have tore-bid to win the business. Instead of a market-wide ceiling, individualbid ceilings were established for each supplier equal to their pre-bid.For example, Supplier B could submit a bid online equal to or below$9,129,639, but not higher. The individual bid ceilings are not visibleto the other suppliers. The result of the online auction withbidder-specific bid limitations is also shown in Table 9.

As illustrated, all suppliers lowered their bids as a result of theonline auction. Note that suppliers C and D did not drop their bids tomeet the lowest bidder, but reduced their quote to a “walk-away” bidsubstantially lower than their offline bids. However, it is clear thatif the buyer had established a market-wide ceiling at the lowest offlinebid ($8,515,383), Suppliers C and D would not have been able to bid atall. The buyer would have lost the opportunity to award one of thepreferred suppliers (Supplier C), at a bid that is $960,621 better thanthe offline bid ($9,635,396 less $8,674,775). In an industrial supplymarket, the difference between Supplier C ($8,674,775) and Supplier A($8,352,524) may not justify the intangible risk and qualification costsof switching from a trusted supplier to a new source.

Consider also the (hypothetical) outcome shown in Table 10 below.

TABLE 10 Historic Price = $10,564,300 Actual Online Auction Results(w/Bidder-Specific Pre-bid Results Bid Limitations) Savings Savings RankBidder Bid (%) Bidder Bid (%) 1 Supplier A $8,515,383 19.4% Supplier A$8,515,383 19.4% 2 Supplier B $9,129,639 13.6% Supplier B $8,874,01216.0% 3 Supplier C $9,635,396  8.8% Supplier C $8,821,191 15.5% 4Supplier D $10,289,320   2.6% Supplier D $9,465,808 10.4%

In this example, as a result of the online auction, Suppliers B, C and Dlowered their bids to the “walk-away prices” assumed above. Supplier Adid not lower their bid but were forced (by the bidder-specific bidlimitations feature) to place a bid equal to the bid placed offline. Ifthey did not bid at all, according to the auction rules they would havebeen ineligible for an award.

Consider the potential outcomes in the absence of a bidder-specific bidlimitations feature. In a first scenario, the buyer establishes amarket-wide ceiling at the lowest offline bid ($8,515,383). The resultis shown below in Table 11.

TABLE 11 Historic Price = $10,564,300 Online Auction Results(w/Bidder-Specific Bid Pre-bid Results Limitations) Savings Savings RankBidder Bid (%) Bidder Bid (%) 1 Supplier A $8,515,383 19.4% Supplier A$8,515,383  19.4% 2 Supplier B $9,129,639 13.6% Supplier B No bid 0% 3Supplier C $9,635,396  8.8% Supplier C No bid 0% 4 Supplier D$10,289,320   2.6% Supplier D No bid 0%

In this case, all suppliers would have been prevented from submitting abid online, except for Supplier A. The buyer may still be able to acceptthe offline bids, but at best they lose the opportunity to receive abetter bid from Supplier B, C and D.

In a second scenario, the buyer establishes a market-wide ceiling at thehighest offline bid ($10,289,320), and chooses to forego the right toaccept the offline bids. result is shown below in Table 12.

TABLE 12 Historic Price = $10,564,300 Online Auction Results(w/Bidder-Specific Bid Pre-bid Results Limitations) Savings Savings RankBidder Bid (%) Bidder Bid (%) 1 Supplier A $8,515,383 19.4% Supplier A$8,863,448 16.1% 2 Supplier B $9,129,639 13.6% Supplier B $8,874,01216.0% 3 Supplier C $9,635,396  8.8% Supplier C $8,926,834 15.5% 4Supplier D $10,289,320   2.6% Supplier D $9,465,808 10.4%

In this case, Suppliers B, C and D compete by lowering their quotes inresponse to bids placed by the other suppliers until they each reachtheir walk-away price. Once they reach their walk-away price they stopbidding. When the lowest bid reaches Supplier B's walk-away price($8,874,012), all suppliers cease to bid except for Supplier A. SupplierA places one bid just below Supplier B to reach first place. With noresponse from Supplier B, the auction closes. The buyer has lost thepotential to extract an additional $348,065 from Supplier A ($8,863,448less $8,515,383).

In a third scenario, the buyer establishes a market-wide ceiling at thehighest offline bid ($10,289,320), and chooses to retain the right toaccept the offline bids. In this case, the outcome is highly dependenton the behavior and beliefs of the individual bidders. In the worstpossible scenario, all suppliers are highly confident of their offlinebids and see no reason to place a bid until they are challenged by abetter bid online. In this situation, it is possible that no-one placesa bid, each supplier waiting for someone else to make a move. The marketcloses with no activity and the buyer loses all potential gains from aninteractive auction (Table 10).

In the best possible situation, Supplier A does not realize they havethe leading bid and is concerned that someone else is better placed.Supplier A would likely place a bid above their walk-away price. AssumeA places a bid at $9,200,000, above B's offline bid but below C and D's.D responds with their walk-away bid, $9,465,808 (the best they can do).C responds and continues to bid against A until the leading bids gobelow B's offline bid. At this point B is drawn into the competition.Bidding will likely continue until B and C reach their walk-away prices.At this point, A does not need to bid further online, but will be boundto honor their pre-bid. The buyer has achieved all of the gains of Table6.

A range of other scenarios could also arise, depending on how thebidders behave and what the relative walk-away prices and offline bidsare. If C and D had walk-away prices above B's offline bid, then C, D,and A would have stopped bidding before B was drawn into thecompetition. In which case, the result could have been considerablyworse. The point here is that using an online auction can be risky forthe buyer in some situations, due to the potential to share amongsuppliers data that might be better withheld. Bidder-specific bidlimitations help achieve the optimal outcome.

Error Detection and Prevention

It is not uncommon for a bidder to make errors when placing bids duringan auction. The prior system prevented some of these errors through theuse of a confirmation pop-up box on the bidder's user interface. When abidder submits a bid, the software presents a confirmation pop-up box tothe bidder, as shown in FIG. 15A. This box repeats the lot and bidamount, and asks the bidder to confirm that this information is correctprior to sending the bid across the network to the auction server. Thebidder must either confirm the bid by clicking on the “confirm” buttonor cancel the bid using the “cancel” button. Failure to take action atthis point will result in no bid being entered. Once a bid is confirmedand sent to the auction server, it is entered into the online auctionand market information from that bid is displayed to all bidders.

However, the confirmation pop-up box is self-governing. It only helps insituations where the bidder believes the bid is incorrect; there is nosystem-based intelligence in the confirmation pop-up box. Therefore,some bidders have entered erroneous bids even though they had to confirmthe bids. The pace of the auction, and bidding on multiple lotssimultaneously allows for bidder errors. Because erroneous bids affectthe critical integrity of the auctions, additional error detection andprevention-features were developed using system-based intelligence.

One additional layer of protection is through failsafe functionality.Failsafe rules allow the auction coordinator to limit the bidders'ability to enter certain bids. The consequences for breaking these rulescan also be established up front. First, a bidder may be required tomake additional bid confirmations (beyond the first confirmation pop-upbox) prior to submission and acceptance of the bid. Second, a bidder maybe prevented entirely from entering bids that fail certain pre-definedcriteria. One feature of the present invention is the ability toflexibly pre-define failsafe criteria, and flexibly predefineconsequences if that criteria is met, all in relation to specific onlineauctions and different lots within an auction.

In one embodiment, the failsafe rules are implemented by the servercomponent. In an alternate embodiment, the failsafe rules areimplemented by the client component.

Another error prevention feature is the override function. Overrideallows the auction coordinator to override or remove erroneous bids fromthe auction in real-time. A bid can be quickly and efficiently removedbefore it prejudices the positions of other bidders. If a second bidderhas already bid in response to an erroneous bid, all consequential bidscan be removed as well. Accordingly, auctions can be completed bypicking up from the point of the last valid bid, rather than startingover.

If a bid is overridden, the auction coordinator warns the bidders thatan erroneous bid has been received and removed through a message that issent to every bidder and appears as a warning on their user interface.The auction coordinator types in a text message and send it to eachbidder over the same network that is running the auction. Message boxesappear on bidding screens and bidders must click “OK” before they cancontinue to bid.

As an example of these two features, Suppliers B, C, D, & E are engagedin a competitive interaction on lot 1 of a multi-lot auction between1:25 PM and 1:27:30 PM at a price between $1.5 to $1.6 million. The lotis scheduled to close at 1:40 PM, as shown in Table 13.

TABLE 13 LOT 1-Historic Price = $1,768,334 Bidder Bid Time Bid Savings(%) Supplier A 1:07:59 PM $1,801,048 (1.85%) Supplier B 1:25:07 PM$1,585,190 10.36% Supplier C 1:25:49 PM $1,563,522 11.58% Supplier D1:26:32 PM $1,555,230 12.05% Supplier C 1:27:10 PM $1,549,674 12.37%Supplier E 1:27:30 PM $1,542,899 12.75%

Prior to the opening of the auction, the auction coordinator activatedthree failsafe rules. First, once a bidder has placed an initial bid,they may not bid more than 20% below their immediately preceding bid. Inthis example, the rule is defined so that a bidder is prevented fromsubmitting such a bid at all. Second, bidders may not place a bid morethan 10% below the current market leading bid. A bid that is below thislevel activates a warning box displayed in FIG. 15B. Bidders mustconfirm such a bid for a second time before it will be submitted. Third,no bid more than 70% below historic price will be accepted at any pointthroughout the auction.

Supplier F decides to commence bidding on lot 1. On their opening bid,Supplier F omits a zero from the bid amount, entering $153,507 insteadof $1,525,070. This is an-opening bid 91% below historic and 78% belowmarket, thereby violating the second and third rules. Supplier F isprevented from entering this bid.

Next Supplier F enters the bid of $1,525,070. This bid does not violateany failsafe rule and is accepted. Supplier C responds with a lower bidand the market is now as shown in Table 14.

TABLE 14 LOT 1-Historic Price = $1,768,334 Bidder Bid Time Bid Savings(%) Supplier A 1:07:59 PM $1,801,048 (1.85%) Supplier B 1:25:07 PM$1,585,190 10.36% Supplier C 1:25:49 PM $1,563,522 11.58% Supplier D1:26:32 PM $1,555,230 12.05% Supplier C 1:27:10 PM $1,549,674 12.37%Supplier E 1:27:30 PM $1,542,899 12.75% Supplier F 1:28:46 PM $1,535,07013.19% Supplier C 1:29:15 PM $1,533,894 13.26%

Supplier F attempts to respond quickly, entering $1,158,000 instead of$1,518,000. This bid is over 20% below the last bid placed by SupplierF, and more than 10% below the market, This bid violates the first andsecond failsafe rules, and Supplier F is prevented from entering thisbid at all. Supplier F corrects this mistake and enters their best andfinal bid for this lot ($1,518,000).

Supplier F begins monitoring the activity on other lots and decides toplace a bid of $1,354,200 in Lot 2, but inadvertently places the bid inlot 1. This bid is not greater than 20% below the previous bid, nor isit more than 10% below the current market leading bid. Accordingly, noneof the failsafe rules are activated and the bid is entered.

Supplier F immediately recognizes the mistake and contacts the auctioncoordinator. After confirming that this is a bona fide error, theauction coordinator warns the other participants that the latest bidfrom Supplier F is erroneous and activates the override feature. The bidis removed from the online auction.

Bidding continues on this lot without a disruption in the auctionprocess, and without prejudicing the position of the other bidders.

The operation of the error detection features are illustrated in theflow chart in FIG. 15, as shown in process 800. A bidder enters a bid atstep 810. A confirmation box is then displayed to the bidder at step820. An example of the bid confirmation box is shown in FIG. 15A. If thebidder decides not to enter the bid in step 830, then the bid iscanceled, and the bidder can then enter another bid in step 810. If thebidder confirms the bid at step 830, then the bid is checked againstpredefined failsafe criteria at step 840. The first check is to see ifthe bid fails predefined criteria that prevents the bid from beingentered entirely. If the bid does fail this first test, then a message,such as the one in FIG. 15B, is displayed to the bidder in step 845, andthe bidder must reenter the bid at step 810. If the bid passes the firstfailsafe criteria, then a second check is performed at step 850. Forthis second level of predefined criteria, if the bid fails to pass, thenthe bidder may still enter the bid if he confirms it again at step 855.An example of the reconfirmation box is shown in FIG. 15C. If the bidderreconfirms the bid, then is entered into the auction at step 860. If thebid passed the reconfirmation failsafe criteria at step 850, then noreconfirmation is needed, and the bid is entered into the auction atstep 860. The entire process 800 is repeated for every bid that issubmitted in the auction.

While the invention has been described in detail and with reference tospecific embodiments thereof, it will be apparent to one skilled in theart that various changes and modifications can be made therein withoutdeparting from the spirit and scope thereof. In particular, it should benoted that while the auction functions described above have beendescribed in the context of downward pricing auctions the auctionfunctions can be equally applied to upward pricing auctions. Thus, it isintended that the present invention cover the modifications andvariations of this invention provided they come within the scope of theappended claims and their equivalents.

What is claimed is:
 1. A computer program product for enabling aprocessor in a computer system to control overtime in an electronicauction, said computer program product comprising: a computer usablemedium having computer readable program code means embodied in saidmedium for causing an application program to execute on the computersystem, said computer readable program code means comprising: a firstcomputer readable program code means for enabling the computer system tooffer a plurality of lots, defined at least in part by a buyer, to aplurality of potential sellers, each of said plurality of lots having atleast one product; a second computer readable program code means forenabling the computer system to define a closing time for each of saidplurality of lots, wherein a closing time for a lot defines a timebefore which bids for the lot are to be submitted by a potential seller;a third computer readable program code means for enabling the computersystem to define an overtime extension parameter for each of saidplurality of lots, said overtime extension parameter indicating a lengthof an overtime period for an associated lot, wherein an overtimeextension parameter for a lot is based upon characteristics of one ormore items in the lot; a fourth computer readable program code means forenabling the computer system to determine whether an overtime period istriggered in one of said plurality of lots; and a fifth computerreadable program code means for enabling the computer system to extendthe auction for said one of said plurality of lots by an amount of timedefined by said overtime extension parameter associated with said one ofsaid plurality of lots, if an overtime period is triggered in said oneof said plurality of lots.
 2. The computer program product of claim 1,further comprising computer readable program code means for enabling thecomputer system to store overtime extension parameters for each of saidplurality of lots.
 3. The computer program product of claim 1, whereinsaid fifth computer readable program code means comprises computerreadable program code means for enabling the computer system to add thevalue of an overtime extension parameter with a market closing time fora lot.
 4. The computer program product of claim 1, further comprisingcomputer readable program code means for enabling the computer system todynamically vary an overtime extension parameter associated with a lotduring an auction for the lot.
 5. A system to control overtime in anelectronic auction, comprising: means for offering a plurality of lots,defined at least in part by a buyer, to a plurality of potentialsellers, each of said plurality of lots having at least one product;means for defining a closing time for each of said plurality of lots,wherein a closing time for a lot defines a time before which bids forthe lot are to be submitted by a potential seller; means for defining anovertime extension parameter for each of said plurality of lots, saidovertime extension parameter indicating a length of an overtime periodfor an associated lot, wherein an overtime extension parameter for a lotis based upon characteristics of one or more items in the lot; means fordetermining whether an overtime period is triggered in one of saidplurality of lots; and means for extending the auction for said one ofsaid plurality of lots by an amount of time defined by said overtimeextension parameter associated with said one of said plurality of lots,if an overtime period is triggered in said one of said plurality oflots.
 6. The system of claim 5, further comprising means for storingovertime extension parameters for each of said plurality of lots.
 7. Thesystem of claim 5, wherein said means for extending the auction adds thevalue of an overtime extension parameter with a market closing time fora lot.
 8. The system of claim 5, further comprising means fordynamically varying an overtime extension parameter associated with alot during an auction for the lot.
 9. A computer program product forenabling a processor in a computer system to control overtime in anelectronic auction, said computer program product comprising: a computerusable medium having computer readable program code means embodied insaid medium for causing an application program to execute on thecomputer system, said computer readable program code means comprising: afirst computer readable program code means for enabling the computersystem to offer a lot, defined at least in part by a buyer, to aplurality of potential sellers, said lot having at least one product; asecond computer readable program code means for enabling the computersystem to define a closing time for said lot, wherein said closing timefor said lot defines a time before which bids for the lot are to besubmitted by a potential seller; a third computer readable program codemeans for enabling the computer system to receive a first bid from apotential seller for said lot; a fourth computer readable program codemeans for enabling the computer system to identify said first bid as acurrent best bid; a fifth computer readable program code means forenabling the computer system to compare each successively received bidto said current best bid, and identify said successive bid as saidcurrent best bid if said successive bid is better than said current bestbid; and a sixth computer readable program code means for enabling thecomputer system to determine whether a received bid is better than saidcurrent best bid; and if said received bid is better than said currentbest bid, identify said received bid as current best bid and extend saidclosing time for said first lot by a second time interval; and if saidreceived bid is not better than said current best bid, determine whethersaid received bid satisfies at least one behind-market bid lot extensioncriteria and if said received bid satisfies at least one behind-marketbid lot extension criteria, extend said closing time for said first lotby a third time interval.
 10. The computer program product of claim 9,wherein said second time interval is equal to said third time interval.11. The computer program product of claim 9, wherein said sixth computerreadable program code means for determining whether said received bidsatisfies at least one behind-market bid lot extension criteriacomprises computer readable program code means for determining whethersaid received bid is received within a fourth time interval of saidclosing time.
 12. The computer program product of claim 9, wherein saidsixth computer readable program code means for determining whether saidreceived bid satisfies at least one behind-market bid lot extensioncriteria comprises computer readable program code means for determiningwhether said received bid is within a predefined percentage of saidcurrent best bid.
 13. The computer program product of claim 12, whereinsaid computer readable program code means for determining whether saidreceived bid satisfies at least one behind-market bid lot extensioncriteria comprises computer readable program code means for storing apercentage parameter in memory.
 14. The computer program product ofclaim 9, wherein said sixth computer readable program code means fordetermining whether said received bid satisfies at least onebehind-market bid lot extension criteria comprises computer readableprogram code means for determining whether said received bid is higherthan said current best bid by a selected amount.
 15. The computerprogram product of claim 14, wherein said computer readable program codemeans for determining whether said received bid satisfies at least onebehind-market bid lot extension criteria comprises computer readableprogram code means for storing a price distance parameter in memory. 16.The computer program product of claim 9, wherein said sixth computerreadable program code means for determining whether said received bidsatisfies at least one behind-market bid lot extension criteriacomprises computer readable program code means for determining whethersaid received bid is from an incumbent supplier.
 17. The computerprogram product of claim 16, wherein said computer readable program codemeans for determining whether said received bid satisfies at least onebehind-market bid lot extension criteria comprises computer readableprogram code means for storing an incumbent supplier parameter inmemory.
 18. The computer program product of claim 9, wherein said sixthcomputer readable program code means for determining whether saidreceived bid satisfies at least one behind-market bid lot extensioncriteria comprises computer readable program code means for determiningwhether said received bid is within a predefined number of rank ordinalpositions of said current best bid.
 19. The computer program product ofclaim 18, wherein said computer readable program code means fordetermining whether said received bid satisfies at least onebehind-market bid lot extension criteria comprises computer readableprogram code means for storing an ordinal position parameter in memory.20. A system to control overtime in an auction, comprising: means foroffering a lot, defined at least in part by a buyer, to a plurality ofpotential sellers, said lot having at least one product; means fordefining a closing time for said lot, wherein said closing time for saidlot defines a time before which bids for the lot are to be submitted bya potential seller, means for receiving a first bid from a potentialseller for said lot; means for identifying said first bid as a currentbest bid; means for comparing each successively received bid to saidcurrent best bid, and identifying said successive bid as said currentbest bid if said successive bid is better than said current best bid;and means for determining whether a received bid is better than saidcurrent best bid; and if said received bid is better than said currentbest bid, means for identifying said received bid as said current bestbid and extending said closing time for said first lot by a second timeinterval; and if said received bid is not better than said current bestbid, means for determining whether said received bid satisfies at leastone behind-market bid lot extension criteria; and if said received bidsatisfies at least one behind-market bid lot extension criteria,extending said closing time for said first lot by a third time interval.21. The system of claim 20, wherein said second time interval is equalto said third time interval.
 22. The system of claim 20, wherein saidmeans for determining whether said received bid satisfies at least onebehind-market bid lot extension criteria determines whether saidreceived bid is received within a fourth time interval of said closingtime.
 23. The system of claim 20, wherein said means for determiningwhether said received bid satisfies at least one behind-market bid lotextension criteria determines whether said received bid is within apredefined percentage of said current best bid.
 24. The system of claim23, wherein said means for determining whether said received bidsatisfies at least one behind-market bid lot extension criteria stores apercentage parameter in memory.
 25. The system of claim 21, wherein saidmeans for determining whether said received bid satisfies at least onebehind-market bid lot extension criteria determines whether saidreceived bid is higher than said current best bid by a selected amount.26. The system of claim 25, wherein said means for determining whethersaid received bid satisfies at least one behind-market bid lot extensioncriteria stores a price distance parameter in memory.
 27. The system ofclaim 21, wherein said means for determining whether said received bidsatisfies at least one behind-market bid lot extension criteriadetermines whether said received bid is from an incumbent supplier. 28.The system of claim 27, wherein said means for determining whether saidreceived bid satisfies at least one behind-market bid lot extensioncriteria stores an incumbent supplier parameter in memory.
 29. Thesystem of claim 21, wherein said means for determining whether saidreceived bid satisfies at least one behind-market bid lot extensioncriteria determines whether said received bid is within a predefinednumber of rank ordinal positions of said current best bid.
 30. Thesystem of claim 29, wherein said means for determining whether saidreceived bid satisfies at least one behind-market bid lot extensioncriteria stores an ordinal position parameter in memory.
 31. A computerprogram product for enabling a processor in a computer system to controlovertime in an electronic auction, said computer program productcomprising: a computer usable medium having computer readable programcode means embodied in said medium for causing an application program toexecute on the computer system, said computer readable program codemeans comprising: a first computer readable program code means forenabling the computer system to offer a lot, defined at least in part bya buyer, to a plurality of potential sellers, said lot having at leastone product; a second computer readable program code means for enablingthe computer system to define a closing time for said lot, wherein saidclosing time for said lot defines a time before which bids for the lotare to be submitted by a potential seller; a third computer readableprogram code means for enabling the computer system to determine if areceived bid satisfies at least one behind-market bid lot extensioncriteria within a first time interval of said closing time for said lot,wherein said at least one behind-market bid lot extension criteria canbe satisfied if said received bid is not better than a current best bid;and a fourth computer readable program code means for enabling thecomputer system to extend said closing time for said first lot by asecond time interval if said received bid satisfies at least onebehind-market bid lot extension criteria.
 32. The computer programproduct of claim 31, wherein said fourth computer readable program codemeans comprises computer readable program code means for determiningwhether said received bid is received within a third time interval ofsaid closing time.
 33. The computer program product of claim 31, whereinsaid fourth computer readable program code means comprises computerreadable program code means for determining whether said received bid iswithin a predefined percentage of said current best bid.
 34. Thecomputer program product of claim 33, wherein said computer readableprogram code means for determining whether said received bid is within apredefined percentage of said current best bid includes storing apercentage parameter in memory.
 35. The computer program product ofclaim 31, wherein said fourth computer readable program code meanscomprises computer readable program code means for determining whethersaid received bid is higher than said current best bid by a selectedamount.
 36. The computer program product of claim 35, wherein saidcomputer readable program code means for determining whether saidreceived bid is higher than said current best bid by a selected amountincludes storing a price distance parameter in memory.
 37. The computerprogram product of claim 31, wherein said fourth computer readableprogram code means comprises computer readable program code means fordetermining whether said received bid is from an incumbent supplier. 38.The computer program product of claim 37, wherein said computer readableprogram code means for determining whether said received bid is from anincumbent supplier includes storing an incumbent supplier parameter inmemory.
 39. The computer program product of claim 31, wherein saidfourth computer readable program code means comprises computer readableprogram code means for determining whether said received bid is within apredefined number of rank ordinal positions of said current best bid.40. The computer program product of claim 39, wherein said computerreadable program code means for determining whether said received bid iswithin a predefined number of rank ordinal positions of said currentbest bid includes storing an ordinal position parameter in memory.
 41. Asystem to control overtime in an electronic auction, comprising: meansfor offering a lot, defined at least in part by a buyer, to a pluralityof potential sellers, said lot having at least one product; means fordefining a closing time for said lot; wherein said closing time for saidlot defines a time before which bids for the lot are to be submitted bya potential seller; means for determining if a received bid satisfies atleast one behind-market bid lot extension criteria, wherein said atleast one behind-market bid lot extension criteria can be satisfied ifsaid received bid is not better than a current best bid, within a firstinterval of said closing time for said lot; and means for extending saidclosing time for said first lot by a second time interval, if saidreceived bid satisfies at least one behind-market bid lot extensioncriteria.
 42. The system of claim 41, wherein said means for extendingsaid closing time determines whether said received bid is receivedwithin a third time interval of said closing time.
 43. The system ofclaim 41, wherein said means for extending said closing time determineswhether said received bid is within a predefined percentage of saidcurrent best bid.
 44. The system of claim 43, wherein said means fordetermining whether said received bid is within a predefined percentageof said current best bid stores a percentage parameter in memory. 45.The system of claim 41, wherein said means for extending said closingtime determines whether said received bid is higher than said currentbest bid by a selected amount.
 46. The system of claim 44, wherein saidmeans for determining whether said received bid is higher than saidcurrent best bid by a selected amount stores a price distance parameterin memory.
 47. The system of claim 41, wherein said means for extendingsaid closing time determines whether said received bid is from anincumbent supplier.
 48. The system of claim 47, wherein said means fordetermining whether said received bid is from an incumbent supplierstores an incumbent supplier parameter in memory.
 49. The system ofclaim 41, wherein said means for extending said closing time determineswhether said received bid is within a predefined number of rank ordinalpositions of said current best bid.
 50. The system of claim 49, whereinsaid means for determining whether said received bid is within apredefined number of rank ordinal positions of said current best bidstores an ordinal position parameter in memory.
 51. A method to controlovertime in an electronic auction, comprising: a) defining a first timeinterval, a second time interval, a first overtime condition and a firstclosing time for a first lot, wherein said first time interval is anovertime trigger interval representing a time interval during which anovertime condition can cause extension of a closing time; b) determiningwhether said first overtime condition occurs during said first timeinterval; and c) extending said first closing time using said secondtime interval in accordance with said determination.
 52. A method tocontrol overtime in an electronic auction, comprising: a) defining afirst time interval, a second time interval, a first overtime conditionand a first closing time for a first lot, wherein said second timeinterval is an overtime extension interval representing a time intervalto extend a closing time; b) determining whether said first overtimecondition occurs during said first time interval; and c) extending saidfirst closing time using said second time interval in accordance withsaid determination.
 53. A method to control overtime in an electronicauction, comprising: a) defining a first time interval, a second timeinterval, a first overtime condition and a first closing time for afirst lot, wherein said first overtime condition comprises: receiving aplurality of bids; assigning an ordinal rank to each bid from a best bidto a worst bid; and receiving a bid having an ordinal rank that iswithin a predefined number of rank ordinal positions of best bid; b)determining whether said first overtime condition occurs during saidfirst time interval; and c) extending said first closing time using saidsecond time interval in accordance with said determination.
 54. Themethod of claim 53, wherein said predefined number of rank ordinalpositions equals one.
 55. A method to control overtime in an electronicauction, comprising: a) defining a first time interval, a second timeinterval, a first overtime condition and a first closing time for afirst lot, wherein said first overtime condition comprises: receiving aplurality of bids each having a bid price; ordering each bid from a bestbid price to a worst bid price; and receiving a bid having a bid pricewithin a predefined price of said best bid price; b) determining whethersaid first overtime condition occurs during said first time interval;and c) extending said first closing time using said second time intervalin accordance with said determination.
 56. A method to control overtimein an electronic auction, comprising: a) defining a first time interval,a second time interval, a first overtime condition and a first closingtime for a first lot, wherein said first overtime condition comprises:receiving a plurality of bids each having a bid price; ordering each bidfrom a best bid price to a worst bid price; and receiving a bid having abid price within a predefined percentage of said best bid price; b)determining whether said first overtime condition occurs during saidfirst time interval; and c) extending said first closing time using saidsecond time interval in accordance with said determination.
 57. A methodto control overtime in an electronic auction, comprising: a) defining afirst time interval, a second time interval, a first overtime conditionand a first closing time for a first lot, wherein said first overtimecondition comprises receiving a bid from a predefined bidder; b)determining whether said first overtime condition occurs during saidfirst time interval; and c) extending said first closing time using saidsecond time interval in accordance with said determination.
 58. Themethod of claim 57, wherein said predefined bidder is an incumbentbidder.
 59. A method to control overtime in an electronic auction,comprising: a) defining a first time interval, a second time interval, afirst overtime condition and a first closing time for a first lot,wherein said first overtime condition comprises: receiving a first setof bids; determining a first frequency for said first set of bids; andreceiving a second set of bids at a second frequency; b) determiningwhether said first overtime condition occurs during said first timeinterval; and c) extending said first closing time using said secondtime interval in accordance with said determination.
 60. The method ofclaim 59, wherein said second frequency is higher tan said firstfrequency.
 61. A method to control overtime in an electronic auction,comprising: a) defining a first time interval, a second time interval, afirst overtime condition and a first closing time for a first lot,wherein said first overtime condition comprises: receiving a pluralityof bids from a group of bidders; generating a statistical analysisparameter for said received bids; and matching said statistical analysisparameter with a predefined statistical analysis parameter; b)determining whether said first overtime condition occurs during saidfirst time interval; and c) extending said first closing time using saidsecond time interval in accordance with said determination.
 62. A methodto control overtime in an electronic auction, comprising: a) defining afirst time interval, a second time interval, a first overtime conditionand a first closing time for a first lot, wherein said first overtimecondition comprises: receiving a plurality of bids from a bidder;generating a statistical analysis parameter for said received bids; andmatching said statistical analysis parameter with a predefinedstatistical analysis parameter; b) determining whether said firstovertime condition occurs during said first time interval; and c)extending said first closing time using said second time interval inaccordance with said determination.
 63. A method to control overtime inan electronic auction, comprising: a) defining a first time interval, asecond time interval, a first overtime condition and a first closingtime for a first lot; b) determining whether said first overtimecondition occurs during said first time interval; c) extending saidfirst closing time using said second time interval in accordance withsaid determination; d) modifying at least one of said first timeinterval, said second time interval and said first overtime condition;and e) performing (b) and (c) using said at least one modified firsttime interval, second time interval and first overtime condition.
 64. Amethod to control overtime in an electronic auction, comprising: a)defining a first time interval, a second time interval, a first overtimecondition and a first closing time for a first lot; b) determiningwhether said first overtime condition occurs during said first timeinterval; c) extending said first closing time using said second timeinterval in accordance with said determination; d) defining a third timeinterval, a fourth time interval, a second overtime condition and asecond closing time for a second lot; e) determining whether said secondovertime condition occurs during said third time interval; and f)extending said second closing time using said fourth time interval ifsaid second overtime condition occurs.
 65. A method to control overtimein an electronic auction, comprising: a) defining a first time interval,a second time interval, a first overtime condition and a first closingtime for a first lot, wherein said first lot comprises at least one of acustom industrial product and material, and at least one of said firsttime interval, said second time interval and said first overtimecondition is defined in accordance with said at least one of a customindustrial product and materials; b) determining whether said firstovertime condition occurs during said first time interval; and c)extending said first closing time using said second time interval inaccordance with said determination.
 66. A method to control overtime inan electronic auction, comprising: a) defining a first time interval, asecond time interval a first overtime condition and a first closing timefor a first lot, wherein said first overtime condition comprises:receiving a plurality of bids each having a bid price; ordering each bidfrom a best bid price to a worst bid price; and receiving a bid having abid price other than said best bid price; b) determining whether saidfirst overtime condition occurs during said first time interval; and c)extending said first closing time using said second time interval inaccordance with said determination.
 67. A machine-readable medium whosecontents cause a computer to control overtime in an electronic auction,by performing: a) defining a first time interval, a second timeinterval, a first overtime condition and a first closing time for afirst lot, wherein said first time interval is an overtime triggerinterval representing a time interval during which an overtime conditioncan cause extension of a closing time; b) determining whether said firstovertime condition occurs during said first time interval; and c)extending said first closing time using said second time interval inaccordance with said determination.
 68. A machine-readable medium whosecontents cause a computer to control overtime in an electronic auction,by performing: a) defining a first time interval, a second timeinterval, a first overtime condition and a first closing time for afirst lot, wherein said second time interval is an overtime extensioninterval representing a time interval to extend a closing time; b)determining whether said first overtime condition occurs during saidfirst time interval; and c) extending said first closing time using saidsecond time interval in accordance with said determination.
 69. Amachine-readable medium whose contents cause a computer to controlovertime in an electronic auction, by performing: a) defining a firsttime interval, a second time interval, a first overtime condition and afirst closing time for a first lot, wherein said first overtimecondition comprises: receiving a plurality of bids; assigning an ordinalrank to each bid from a best bid to a worst bid; and receiving a bidhaving an ordinal rank that is within a predefined number of rankordinal positions of best bid; b) determining whether said firstovertime condition occurs during said first time interval; and c)extending said first closing time using said second time interval inaccordance with said determination.
 70. The machine-readable medium ofclaim 69, wherein said predefined number of rank ordinal positionsequals one.
 71. A machine-readable medium whose contents cause acomputer to control overtime in an electronic auction, by performing:defining a first time interval, a second time interval, a first overtimecondition and a first closing time for a first lot, wherein said firstovertime condition comprises: receiving a plurality of bids each havinga bid price; ordering each bid from a best bid price to a worst bidprice; and receiving a bid having a bid price within a predefined priceof said best bid price; b) determining whether said first overtimecondition occurs during said first time interval; and c) extending saidfirst closing time using said second time interval in accordance withsaid determination.
 72. A machine-readable medium whose contents cause acomputer to control overtime in an electronic auction, by performing: a)defining a first time interval, a second time interval, a first overtimecondition and a first closing time for a first lot, wherein said firstovertime condition comprises: receiving a plurality of bids each havinga bid price; ordering each bid from a best bid price to a worst bidprice; and receiving a bid having a bid price within a predefinedpercentage of said best bid price; b) determining whether said firstovertime condition occurs during said first time interval; and c)extending said first closing time using said second time interval inaccordance with said determination.
 73. A machine-readable medium whosecontents cause a computer to control overtime in an electronic auction,by performing: a) defining a first time interval, a second timeinterval, a first overtime condition and a first closing time for afirst lot, wherein said first overtime condition comprises receiving abid from a predefined bidder; b) determining whether said first overtimecondition occurs during said first time interval; and c) extending saidfirst closing time using said second time interval in accordance withsaid determination.
 74. The machine-readable medium of claim 73, whereinsaid predefined bidder is an incumbent bidder.
 75. A machine-readablemedium whose contents cause a computer to control overtime in anelectronic auction, by performing: a) defining a first time interval, asecond time interval, a first overtime condition and a first closingtime for a first lot, wherein said first overtime condition comprises:receiving a first set of bids; determining a first frequency for saidfirst set of bids; and receiving a second set of bids at a secondfrequency; b) determining whether said first overtime condition occursduring said first time interval; and c) extending said first closingtime using said second time interval in accordance with saiddetermination.
 76. The machine-readable medium of claim 75, wherein saidsecond frequency is higher than said first frequency.
 77. Amachine-readable medium whose contents cause a computer to controlovertime in an electronic auction, by performing: a) defining a firsttime interval, a second time interval, a first overtime condition and afirst closing time for a first lot, wherein said first overtimecondition comprises: receiving a plurality of bids from a group ofbidders; generating a statistical analysis parameter for said receivedbids; and matching said statistical analysis parameter with a predefinedstatistical analysis parameter; b) determining whether said firstovertime condition occurs during said first time interval; and c)extending said first closing time using said second time interval inaccordance with said determination.
 78. A machine-readable medium whosecontents cause a computer to control overtime in an electronic auction,by performing: a) defining a first time interval, a second timeinterval, a first overtime condition and a first closing time for afirst lot, wherein said first overtime condition comprises: receiving aplurality of bids from a bidder; generating a statistical analysisparameter for said received bids; and matching said statistical analysisparameter with a predefined statistical analysis parameter; b)determining whether said first overtime condition occurs during saidfirst time interval; and c) extending said first closing time using saidsecond time interval in accordance with said determination.
 79. Amachine-readable medium whose contents cause a computer to controlovertime in an electronic auction, by performing: a) defining a firsttime interval, a second time interval, a first overtime condition and afirst closing time for a first lot; b) determining whether said firstovertime condition occurs during said first time interval; c) extendingsaid first closing time using said second time interval in accordancewith said determination; d) modifying at least one of said first timeinterval, said second time interval and said first overtime condition;and e) performing (b) and (c) using said at least one modified firsttime interval, second time interval and first overtime condition.
 80. Amachine-readable medium whose contents cause a computer to controlovertime in an electronic auction, by performing: a) defining a firsttime interval, a second time interval, a first overtime condition and afirst closing time for a first lot; b) determining whether said firstovertime condition occurs during said first time interval; c) extendingsaid first closing time using said second time interval in accordancewith said determination; d) defining a third time interval, a fourthtime interval, a second overtime condition and a second closing time fora second lot; e) determining whether said second overtime conditionoccurs during said third time interval; and f) extending said secondclosing time using said fourth time interval if said second overtimecondition occurs.
 81. A machine-readable medium whose contents cause acomputer to control overtime in an electronic auction, by performing: a)defining a first time interval, a second time interval, a first overtimecondition and a first closing time for a first lot, wherein said firstlot comprises at least one of a custom industrial product and material,and at least one of said first time interval, said second time intervaland said first overtime condition is defined in accordance with said atleast one of a custom industrial product and material; b) determiningwhether said first overtime condition occurs during said first timeinterval; and c) extending said first closing time using said secondtime interval in accordance with said determination.
 82. Amachine-readable medium whose contents cause a computer to controlovertime in an electronic auction, by performing: a) defining a firsttime interval, a second time interval, a first overtime condition and afirst closing time for a first lot, wherein said first overtimecondition comprises: receiving a plurality of bids each having a bidprice; ordering each bid from a best bid price to a worst bid price; andreceiving a bid having a bid price other than said best bid price;b)ition occurs during said first time interval; and c) extending saidfirst closing time using said second time interval in accordance withsaid determination.
 83. A method to control overtime in an electronicauction, comprising the steps of: (a) offering a plurality of lots,defined at least in part by a buyer, to a plurality of potentialsellers, each of said plurality of lots having at least one product; (b)defining a closing time for each of said plurality of lots, wherein aclosing time for a lot defines a time before which bids for the lot areto be submitted by a potential seller; (c) defining an overtimeextension parameter for each of said plurality of lots, said overtimeextension parameter indicating a length of an overtime period for anassociated lot, wherein an overtime extension parameter for a lot isbased upon characteristics of one or more items in the lot; (d)determining whether an overtime period is triggered in one of saidplurality of lots; and (e) if an overtime period is triggered in saidone of said plurality of lots, extending the auction for said one ofsaid plurality of lots by an amount of time defined by said overtimeextension parameter associated with said one of said plurality of lots.84. The method of claim 1, further comprising the step of storingovertime extension parameters for each of said plurality of lots. 85.The method of claim 1, wherein step (e) comprises the step of adding thevalue of an overtime extension parameter with a market closing time fora lot.
 86. The method of claim 1, further comprising the step ofdynamically varying an overtime extension parameter associated with alot during an auction for the lot.
 87. A method to control overtime inan electronic auction, comprising the steps of: (a) offering a lot,defined at least in part by a buyer, to a plurality of potentialsellers, said lot having at least one product; (b) defining a closingtime for said lot, wherein said closing time for said lot defines a timebefore which bids for the lot are to be submitted by a potential seller;(c) receiving a first bid from a potential seller for said lot, (d)identifying said first bid as a current best bid; (e) comparing eachsuccessively received bid to said current best bid, and identifying saidsuccessive bid as said current best bid if said successive bid is betterthan said current best bid; (f) within a first time interval of saidclosing time for said lot, (i) determining whether a received bid isbetter than said current best bid; (i bid is better than said currentbest bid, identifying said received bid as said current best bid andextending said closing time for said first lot by a second timeinterval; (iii) if said received bid is not better than said currentbest bid, determining whether said received bid satisfies at least onebehind-market bid lot extension criteria; and (iv) if said received bidsatisfies at least one behind-market bid lot exime for said first lot bya third time interval.
 88. The method of claim 87, wherein said secondtime interval is equal to said third time interval.
 89. The method ofclaim 87, wherein step (f)(iii) comprises the step of determiningwhether said received bid is received within a fourth time interval ofsaid closing time.
 90. The method of claim 87, wherein step (f)(iii)comprises the step of determining whether said received bid is within apredefined percentage of said current best bid.
 91. The method of claim16, wherein step (f)(iii) comprises the step of storing a percentageparameter in memory.
 92. The method of claim 87, wherein step (f)(iii)comprises the step of determining whether said received bid is higherthan said current best bid by a selected amount.
 93. The method of claim18, wherein step (f)(iii) comprises the step of storing a price distanceparameter in memory.
 94. The method of claim 90, wherein step (f)(iii)comprises the step of determining whether said received bid is from anincumbent supplier.
 95. The method of claim 94, wherein the step(f)(iii) comprises the step of storing an incumbent supplier parameterin memory.
 96. The method of claim 87, wherein step (f)(iii) comprisesthe step of determining whether said received bid is within a predefinednumber of rank ordinal positions of said current best bid.
 97. Themethod of claim 96, wherein step (f)(iii) comprises the step of storingan ordinal position parameter in memory.
 98. A method to controlovertime in an electronic auction, comprising the steps of: (a) offeringa lot, defined at least in part by a buyer, to a plurality of potentialsellers, said lot having at least one product; (b) defining a closingtime for said lot, wherein said closing time for said lot defines a timebefore which bids for the lot are to be submitted by a potential seller;(c) within a first time interval of said closing time for said lot,determining if a received bid satisfies at least one behind-market bidlot extension criteria, wherein said at least one behind-market bid lotextension criteria can be satisfied if said received bid is not betterthan a current best bid; and (d) if said received bid satisfies at leastone behind-market bid lot extension criter second time interval.
 99. Themethod of claim 98, wherein step (d) comprises the step of determiningwhether said received bid is received within a third time interval ofsaid closing time.
 100. The method of claim 98, wherein step (d)comprises the step of determining whether said received bid is within apredefined percentage of said current best bid.
 101. The method of claim100, wherein step (d) comprises the step of storing a percentageparameter in memory.
 102. The method of claim 98, wherein step (d)comprises the step of determining whether said received bid is higherthan said current best bid by a selected amount.
 103. The method ofclaim 102, wherein step (d) comprises the step of storing a pricedistance parameter in memory.
 104. The method of claim 98, wherein step(d) comprises the step of determining whether said received bid is froman incumbent supplier.
 105. The method of claim 104, wherein step(d)comprises the step of storing an incumbent supplier parameter in memory.106. The method of claim 98, wherein step (d) comprises the step ofdetermining whether said received bid is within a predefined number ofrank ordinal positions of said cbid.
 107. The method of claim 106,wherein step (d) comprises the step of storing an ordinal positionparameter in memory.